The Irish Times view on the Eir court case: a small penalty to pay

Eir, the main provider of fixed-line and mobile telecommunications in the State, has been fined €7,500 for 10 breaches of its internal code of practice for dealing with consumer complaints. The size of the fine imposed by the Dublin District Court belies the severity of the company’s transgressions in this matter.

Telecoms companies are obliged by law to implement a code of practice for dealing with complaints and can be prosecuted by the Commission for Communications Regulation (ComReg) if they breach it. In the 10 cases before the court this week the offence was Eir’s failure to acknowledge and respond to a complaint within 10 working days as stipulated by its own code, amongst other failings. However, it was the details of the cases that were read into the record by ComReg’s lawyers and revelations about Eir’s internal management culture that are the real cause for concern.

The court heard that staff dealing with complaints were warned of disciplinary consequences if they facilitated customers in making an official complaint by providing the phone numbers and webpage addresses as required by law. The judge in the case also heard that complaints were only escalated to the formal channel if the customers used specific “trigger words” and phrases.

This is, as Judge Anthony Halpin pointed out, a disgrace, but when its consequences are spelt out the financial penalty could be said to be on the mild side. The court was told of one customer whose valid complaints about her mobile signal were fobbed off for six months. Consequently, she was unable to call an ambulance for her child on one occasion or take delivery of an important medical device on another.

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Eir issued a statement in the wake of the judgments claiming that ComReg had misinterpreted its documents. The regulator pointed out they did not raise these objections in court.

The trivial nature of the fines imposed – Eir has a turnover of €1.3 billion and 2 million customers – when measured against what transpired speaks to a presumption by ComReg that regulated entities would not seek to circumvent their obligations on the scale demonstrated by Eir.

The scale of fines which can be imposed is redolent of the light touch, or “principles-based” approach taken to financial institutions in the run up to the banking crisis of 2008. The approach was predicated on the notion that the banks would act responsibly in the wider interest.

Financial services regulation has long moved on to what might be considered a big-stick approach, involving significant fines. It is time for ComReg to seek additional powers that would allow it to seek significant sanctions in situations where it is clear that a regulated entity is flouting the rules in a premeditated and co-ordinated fashion.