TalkTalk has been fined £3 million by telecoms regulator Ofcom, after IT system problems led to it incorrectly billing 65,000 of its own and subsidiary Tiscali's customers.

The telecoms firm acquired Tiscali in 2009, and major billing issues emerged during the switchover. Last March, TalkTalk repaid nearly £2.5 million in total to customers.

At one point during the companies' integration, TalkTalk was running nine billing systems.

The company's own 'Trio' (The Right Information Online) platform has now replaced all billing systems in the group. Trio is understood to be based on technology from suppliers Chordiant and Tibco.

The fine issued today is the largest ever imposed by Ofcom on a telecoms firm, and follows a year-long investigation. The regulator had originally said it would not issue a fine, but after TalkTalk missed a deadline for rectifying the problem it decided to impose the penalty.

TalkTalk said it was "disappointed" at the scale of the fine, but the regulator insisted it reflected the "seriousness" of the problems.

Dido Harding, chief executive at TalkTalk, said the company's customer billing was improving. "Last year I recognised that we needed to invest in our systems, processes and customer services and we are making significant progress."