Virgin Media may have breached consumer protection rules by charging customers up to £240 for ending their contract early, according to an investigation by the telecoms regulator Ofcom. In a preliminary ruling this week, Ofcom says it has “reasonable grounds to believe” that Virgin has contravened its general conditions which state companies cannot charge excessive fees that disincentivise customers from switching supplier.
The company may also have fallen foul of Ofcom rules by failing to publish clear information on fees, and by requiring customers who move home to sign a new fixed-term contract or face an early termination charge.
“Having assessed all available evidence, we have reasonable grounds to believe Virgin Media has broken our rules,” says Ofcom. “Virgin Media now has an opportunity to formally respond to our provisional decision. We will take any further representations the company makes into account before our final ruling.”
Ofcom launched its investigation in response to a high number of complaints about the cable giant.
But the most contentious issue – early termination charges levied on those who move home but to an area not served by Virgin’s cable network so cannot get the service even if they wish to continue – is not yet covered by Ofcom’s rules.
Earlier this year, The Guardian reported how 80-year-old Ann Squires was forced to pay £136.88 when she had to leave her home of 40 years and move to a flat three miles away.
When she notified Virgin of her new address she was told that it could no longer provide a service and yet still demanded an early termination charge for cancelling her contract. It issued a default notice under the Consumer Credit Act when she challenged the fee.
Numerous other customers have also been forced to pay up even though Virgin told them it could no longer provide a service.
Surprisingly, Ofcom says: “The terms that require Virgin customers moving home outside of its network to pay early termination charges do not fall within Ofcom’s rules.
“We are continuing to consider whether they raise concerns under general consumer law. We will provide an update on this aspect of its investigation in due course.”
Virgin Media says: “We have received Ofcom’s provisional findings and we will now review them thoroughly. We make it clear to customers that early disconnection fees can apply and we also offer 30-day rolling contracts for those that do not want to sign up for a minimum period, such as 12 months, and need more flexibility.”
This month Ofcom announced an investigation into the early termination fees charged by EE.
