Movistar Forced to Pay Back $2 Million USD to 208,000 Clients for Illegal Service Charges

Colombian regulatory authorities have upheld a decision against Movistar and mandated that the telecom giant must pay back nearly $2 million USD to more than 208,000 clients who incurred an “irregular charge” while switching from a recurring plan to prepaid service. In an appeal ruling, the Superintendency of Industry and Commerce (SIC) in Bogotá stated that Movistar instituting a service charge of 30,000 pesos was misleading, particularly since the company publicized the practice on its website, in newspaper advertisements, and in its physical stores.

In addition to the demand for restitution, SIC upheld a prior fine of more than $450,000 USD for instituting what in practice amounts a fee for a plan change that, according to the nation’s telecommunications regulations, should be provided at no charge. “It was found that, within the dynamics of the change process, the operator had planned such a charge as a systematic and deliberate practice, even against the will or needs of its consumers,” wrote SIC in its decision.

Movistar, which is owned by Madrid-based Telefonica, must pay back customers who made the switch as far back as October, 2011, and develop a full list of affected clients within the next 20 days. According to the telecom’s current estimate, at least 208,000 customers were forced to pay the service charge when switching plans.

Anyone who is one the final list of aggrieved customers can either re-claim their money, in cash, at a Movistar location or through another appropriate method. Current clients on plans that include recurring bills can also choose an adjustment on their account that should be granted immediately.

As of this morning, Movistar had not been notified by SIC of the final ruling. But a representative said that it would abide by any decision that was handed down. “Regarding the decision announced today by the Superintendency of Industry and Commerce, Movistar … has not been notified of it,” said Movistar in a statement. “Once this happens, it will comply with the order issued by the entity, without prejudice to their right to bring contentious actions that may be required.”