TalkTalk wrongly billed more than 62,000 customers for cancelled broadband and home phone services, Ofcom has revealed.
TalkTalk broadband has paid out almost £2.5million in refunds and goodwill payments since the telecoms regulator began investigating the problem.
But despite this, Ofcom said that it was still receiving complaints from consumers and would be continuing its investigation.
If Ofcom finds that TalkTalk is still breaking the rules, the cheap broadband provider could face further enforcement or even a fine.
TalkTalk said that the majority of the problems were caused by the old billing and cancellation systems used by Tiscali broadband - which it bought in 2009.
A spokesperson for TalkTalk, which has 4.2 million broadband customers, said: "We're pleased that Ofcom has recognised the significant steps we've taken to fix the billing issues identified.
"We moved all of our customers to our single billing platform at the end of January and our focus on resolving any outstanding billing issues continues."
Customers affected by the problem can contact the TalkTalk Group directly on its freephone hotline: 0800 5428 073.