Telecom provider fined $400k over rate hike

| 21/08/2023 | 32 Comments
Flow branch at the Countryside Shopping Village in Savannah, Cayman News Service
Flow branch at the Countryside Shopping Village in Savannah

(CNS): Regional telecommunications company Flow has been fined $400,000 by the Utility Regulation and Competition Office (OfReg) after breaching its licence. Flow increased its business customer rates from $30 to $34.99 from January 2019 to April 2022 without approval. OfReg also said the firm failed to comply with its obligation to provide the regulator with its quarterly data report.

In a relatively rare show of its teeth, which it has under the Regulation and Competition Act, OfReg imposed the fine, which Flow has paid, for a “serious breach” of its licence for the unapproved price increase and delivered a warning for the data reporting breach.

Sonji Myles, OfReg Executive Director for Information, said that licensees must comply with the terms of their licence and the laws of the Cayman Islands.

“As the regulator for the utilities sectors, it is our job to protect consumers and ensure licensees are held to account when they do not,” he said. “We will act accordingly and apply the full force of the sanctions made available to us under the law. In this case, the fine imposed on FLOW is in the upper region of the maximum amount and reflects the seriousness of the first breach of its licence, applying unapproved price increases.”

Myles said a warning was deemed sufficient for For the failure to provide data reports, but OfReg would closely monitor Flow’s future reporting.

Peter Gough, who continues as the interim boss at the beleaguered regulator, said it was important that customers are protected from organisations that do not comply with their licence conditions.

“OfReg has drafted Consumer Protection Regulations for the ICT Sector that will further enhance the protection of customers,” he said. “We take our responsibility to protect consumers very seriously indeed. Where we find failures by licensees and operators to comply with the law, we will not hesitate to exercise our authority and impose fines and sanctions at appropriate levels to discipline operators and warn others of the consequences of non-compliance with the terms of their licences.”

Gough also said that in OfReg’s role as a policy advisor to the Cayman Islands Government, it was asking lawmakers to consider increasing the types and levels of penalties available to the regulator, including provisions to make restitution orders for consumers.

“In the meantime, OfReg urges FLOW to honour their obligations to their customers,” Gough added.

It is not clear whether Flow has any plans to refund customers who are out of pocket due to the unauthorised additional charges over a three-year period.

Since its inception, OfReg has been criticised by the general public for failing to protect consumers, and the Office of the Auditor General has raised concerns about the multiple failings of the regulator since it was established in 2017.

Infrastructure Minister Jay Ebanks, who is responsible for OfReg, pledged his support to what he said was its hardworking staff and to provide the legislative support that it needs to be a more effective regulator.

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Category: Business, ICT

Comments (32)

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  1. Anonymous says:

    Hmmm. The amount of the fine seems correlated to just about cover OfReg’s management payroll for the year.

    • Anonymous says:

      No way 8:31. I’m given to understand the interim director alone gets over $200,000 a year and those others at the top are not far behind.

  2. Anonymous says:

    Banks next with their BS charges with withdrawing your own cash etc!

    • Anonymous says:

      The fact that they take your savings, invest it, and give you pennies on the dollar compared to what they made on it, THEN want to charge you a fee for holding/using your own money, is absolute insanity.

      This is why they hate crypto so much.

      • Anonymous says:

        LOL. So take your money out the bank and put it all in crypto. What could go wrong? Besides all the fees you have to pay to actually use crypto.

    • Anonymous says:

      Thank you OR, finally, a fine for us the consumer. Are they going to return the money which you have stated they illegally gained?

  3. Anonymous says:

    That money should be given back to their long suffering customers. Honestly people complain about CUC and the supermarkets but cell phone service is by far the biggest rip off here. I get no minutes and limited data for $100/m compared to my UK phone where I get unlimited minutes and data for $7/m. The markup is criminal and that ignores the fact they have such a tiny geographic area to customer ratio to cover.

  4. Anonymous says:

    So much wrong with the local telecoms companies, its effectively a cartel (as with CIREBA in real estate)

    it should be illegal for them to charge you for minutes you dont use, and we should be allowed to roll them over

    the roaming charges are beyond extortionate

    the monthly plans are scandalous

    there is every likelihood the cayman entities of these regional groups are funding the loss making countries they operate in

    yet again, Cayman residents suffer from a total lack of consumer protection, government ability, anything really that we’d expect from a nation that prides itself on being 1st world leading financial center..

    • Anonymous says:

      That’s why I don’t take my UK chip out when I come back from uni. Even the roaming charges are less than the local phone plans.

  5. Calling Out Corruption says:

    fine was about 50% (estimate) of the profit they made from cheating the customers. So the fine goes to government and the profit goes to Flow. They are complicit.

  6. Anonymous says:

    as per usually, corporate greed in not punished. Fines like this are not a deterrent for a company like flow, its just the cost of doing business.

  7. Anonymous says:

    Imagine working in a customer facing role for these pirates?

    I imagine that’s why the customer service sucks. All the staff who could do it, don’t want to work there, so they’re left with the rudest, most obtuse characters on the planet.

    Digicel, you’re no better either, before you start thinking you’re all that.

  8. Anonymous says:

    only $400,000?! WTF!

  9. Anonymous says:

    So when are the consumers going to be repaid? Class Action law suit anyone???

  10. Anonymous says:

    Now if they would stop their policy of automatically charging $10/day for data roaming when using only the cellular portion of service and not utilising any data or even having the data roaming feature on

  11. Anonymous says:

    Only fined because it affects the business customers. Meanwhile Ofreg sits twiddling their thumbs while Flow break it off in everyone else.

    • Anonymous says:

      Can’t please you can they ? Jesus we can complain

      • Anonymous says:

        I mean, Yay hooray for the corporations?? I am not any of the companies that this helps. Why would “Big fish pays fees to bigger fish” make me happy?

  12. Anonymous says:

    GOOD! Next on the consumer protection list should be CUC and then XXXX Cayman banks being slow as a turtle to raise term deposits (maybe a 10 months down the road) while lightning fast at raising mortgage rates (next morning) after the US Fed raises their rates.

  13. Anonymous says:

    That’s what they get. Ol crooks

  14. Anonymous says:

    So who gets the $400,000? Shouldn’t it be user to reimburse the customers that FLOW stole it from?

    • Anonymous says:

      No! Go sue them yourself, you now have the proof of the breach, use that and sue them, stop looking for freeness

  15. Anonymous says:

    the report should be audited to see how much Flow made from the illegal price increase over those 3 years then fine them double that amount. THAT is sending a message. what use is charging them 400k if they made more from it?

  16. Anonymous says:

    Can they also be fined over the phantom roaming data charges they hit all and sundry with?

    • Anonymous says:

      Go in and make them reverse them. They cannot charge you for a service you haven’t used & didn’t request

      • Anonymous says:

        First you have to consider the time needed to do so vs the amount they charged. A small amount isn’t worth my time and they prob know that.

  17. Anonymous says:

    Time for an OfReg fleet upgrade!


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