Tesco Mobile is to refund 27,500 customers who were wrongly hit with charges worth a total of €380,000 after they cancelled their contract.

The move follows an own initiative review that the virtual carrier carried out of its billing system in May.

It sought to determine if customers were being charged for services beyond the cancellation of their contracts.

Tesco Mobile found 27,500 of its customers had been incorrectly charged with these so-called post cancellation charges.

It is now set to refund those concerned, by sending them an email with a voucher attached that can be redeemed for cash at a Payzone retailer within 90 days.

Post cancellation charges are not permitted under the Communications Regulation Act.

Tesco Mobile's review came after Comreg revealed in December that Virgin Media Ireland had been keeping money as credit on inactive accounts, rather than proactively refunding customers, unless they came requesting it.

Virgin Media Ireland agreed to refund €3m to over 100,000 customers on foot of the findings.

Comreg says it will continue to monitor compliance on the issue and will take enforcement action if required.