Vodafone Ireland will have to refund more than €2m to 74,000 customers after it was found to have wrongly billed them following the cancellation of their contracts and failed to refund the money properly.

Following an inquiry by the Commission for Communications Regulation (ComReg), Vodafone conducted a review of its billing system which determined that post-cancellation charges (PCC) were wrongly imposed on certain customers. Rather than refunding the money, Vodafone gave it back as credits on inactive accounts which the customer never received. The company was found to have only issued a refund if one was requested by a customer.

Barbara Delaney, director of retail and consumer services at ComReg, said there have been a number of investigations into this practice among providers.

"Operators have found that when customers move away and cancel their contracts, a bill has been issued as normal, including for areas whereby the contract is actually cancelled," she said. "They have subsequently credited the customer to their account but the customer didn't actually get that."

Ms Delaney said this has happened with four providers so far and, to date, around €8m has been refunded as a result. Affected customers could see refunds from a few euro up to the full cost of their monthly change, she said.

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The review also found that customers had other types of credits, unrelated to post-cancellation charges, on their inactive accounts and which had not been claimed by customers, following the cancellation of contracts.

These were also not proactively refunded by Vodafone. After the review, Vodafone advised ComReg that more than 74,000 customers were impacted by the charging of PCCs and credits remaining on inactive accounts. Vodafone will refund affected customers to the value of €1.3million in PCCs and €790,000 for other credits that remained on inactive accounts.