BT has acquired TalkTalk and its wholesale arm PlatformX Communications out of administration in a deal designed to protect services for around 2.5 million customers. The Government has also intervened, with Culture Secretary Lisa Nandy MP ordering the Competition and Markets Authority to investigate the deal amid concerns about the impact on vital services and vulnerable customers.
TalkTalk customers have been given a lifeline, but what happens to customers who have money sitting on their account, have paid in advance or are owed a refund?
While customers have been reassured that their broadband services will continue, the collapse has raised questions about what happens to money, contracts and bills when a company goes into administration.
Molly Monks, Licensed Insolvency Practitioner and Managing Director of Parker Walsh has said customers should understand the difference between a company entering administration and the service being transferred to another provider. She said, “The word ‘insolvency’ can understandably make customers worry that any money they are owed has simply disappeared.” She continues:
“But where a business is sold to another provider and the customer relationship and service continue, the position can be very different from a company simply shutting down. Customers should not assume they have lost money, but they should keep a clear record of what they have paid and any balance they believe they are owed.”
See more of Molly’s responses to common questions below:
Q. What happens to money in your TalkTalk account?
Customers who have paid for services in advance or have a credit balance on their account may be concerned about whether they will get that money back. Molly said, “This is where the distinction between being a customer and being a creditor becomes important.” She continues:
“If a company owes you money when it becomes insolvent, you may technically have a claim against the business. What you can recover will depend on the circumstances of the insolvency and how the business has been transferred. Customers should not assume that they have automatically lost money simply because TalkTalk has entered administration.”
She urged customers to save recent bills, payment confirmations, direct debit records and correspondence showing any outstanding balance.
Q. Can TalkTalk customers get a refund?
Customers should check their account and any communication from TalkTalk or BT if they believe they are owed money. Molly said:
“If you have paid for a service in advance or believe you have a credit balance, keep evidence of that payment and your account balance. The fact that TalkTalk has entered administration does not by itself mean that the money has disappeared. The important question is how that customer liability is dealt with as part of the transfer of the business.”
Customers should wait for official information before cancelling payments or making changes to their account.
Q. Will TalkTalk customers pay more?
There is currently no immediate change to TalkTalk customers’ prices, contracts or billing arrangements. Ofcom says customers should continue using their services as normal during the transition. Molly said:
“Customers should not assume that the change of ownership means their price or contract has automatically changed. Check your bills as normal and look carefully at any communication from BT or TalkTalk setting out changes to your account.”
Q. Will your broadband be cut off?
No. TalkTalk customers will continue to receive their services during the transition. Ofcom has confirmed that customers should be able to continue using their landline, broadband and pay-TV services as normal. Molly said:
“The most important thing for customers is not to make a knee-jerk decision and immediately cancel their service because they have seen headlines about the company going bust. If another provider takes over a failed telecoms company, customers will generally continue receiving their service and their existing contract should transfer across.”
Q. Do TalkTalk customers need to switch?
No. Customers do not need to switch simply because TalkTalk has entered administration. If the new provider changes the terms of a contract, customers should have the right to leave without paying an early termination charge. Molly said: “If you are happy with your service, there is no reason to panic and switch because of the administration.” She advises,
“Wait for official communication and check exactly what, if anything, is changing before making a decision. If you are already out of contract, you can use the situation as an opportunity to compare deals and see whether you can get a better price elsewhere.”
Q. What should TalkTalk customers do now?
Molly said customers should:
- Check their latest TalkTalk bill and note any credit or outstanding balance.
- Keep payment records showing what they have paid.
- Save contracts and correspondence relating to their account.
- Continue paying bills as normal unless they are told otherwise.
- Wait for official communication before making changes to their service.
- Check their rights if their price or contract terms change.
Molly concludes:
“The biggest lesson for customers is to keep their paperwork. If you believe TalkTalk owes you money, or there is a dispute over what you have paid, having a clear record could be extremely important. Administration does not automatically mean customers lose money, particularly where the underlying service and customer relationships are being transferred to a new provider.”
