Ofcom has provisionally concluded that Virgin Media overcharged customers on early termination fees on contracts for its broadband, phone and television services.
The regulator’s decision follows a formal investigation launched in June last year into the fairness of the company’s terms and conditions, specifically its charges for ending a contract early, after receiving complaints from customers.
The probe included circumstances when customers had to end a contract because they were moving house.
Ofcom said it had “reasonable grounds to believe” that Virgin contravened rules by setting and charging customers early termination fees which were too high, required customers moving house to an area within Virgin’s network to sign up to a new fixed term contract or pay the fees, and failed to take action to ensure that its conditions and procedures for contract termination did not act as disincentives to its customers against changing provider.
It also believed Virgin failed to publish clear and up-to-date information about the early termination fees on its website.
The investigation looked at the charges over the period between September 1 2016 and September 11 last year.
Ofcom said it aimed to reach its final decision by the end of summer.
All providers must ensure that their conditions or procedures for customers wanting to terminate a contract do not act as a disincentive for switching provider.
We have reasonable grounds to believe that Virgin Media has broken our rules by overcharging people wishing to leave their contracts early.Ofcom
Complaints surfaced on various forums from Virgin Media customers who had been charged into the hundreds of pounds in early disconnection fees after signing up to set term contracts, but later finding they needed to move house part way through the agreement.
Virgin runs its own cable network, which means that customers can only take their contracted service with them if their new house is also connected.
An Ofcom spokeswoman said: “Having assessed all available evidence, we have reasonable grounds to believe that Virgin Media has broken our rules by overcharging people wishing to leave their contracts early.
“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 making our final ruling.”
A Virgin Media spokesman said: “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.”