Regulator Ofcom has fined the companies £1.5m each after they found they had billed customers for unused services or, in some cases, cancelled accounts between January and November 2010.
The regulator then issued both companies with a legally binding letter, requiring them to take steps to improve their billing processes by December 2 2010.
But while both companies began the process of resolving the faults with their billing processes, Ofcom found that they still managed to incorrectly bill 3,000 of their customers between December 2 2010 and March 4 2011.
Ofcom could have fined each company up to ten per cent of its turnover, signficantly more than the £1.5m each it did; but, it said that the steps the firms had taken to comply with the rules had resulted in the lower fines.
Both TalkTalk and Tiscali also paid over £2.5m to their 65,000 affected customers in refunds and goodwill payments, which Ofcom said it had taken into account.
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