Virgin Media is set to appeal a £7m fine from Ofcom after it was found to have overcharged nearly 82,000 customers for leaving their contracts early.
The mobile and broadband provider overcharged its customers by an average of £34 and some 6,800 by more than £100, the communications regulator revealed.
The company’s CEO, Tom Mockridge, described the ruling as “not justified , proportionate or reasonable”. “We wholeheartedly reject the claim by Ofcom that our ETC levels dissuaded customers from switching,” he added. “This unreasonable decision and excessive fine does not reflect the swift actions we took, the strong evidence we have presented, or our consistent, open and transparent cooperation with the regulator.”
Ofcom’s investigation revealed that, over the course of nearly a year, Virgin Media was hitting customers with early-exit charges higher than they had agreed to when signing up. These charges, Ofcom ruled, deterred customers from moving contracts.
Virgin has reimbursed those customers it could contact, and donated to charity the excess fees from those it couldn’t.
The communications regulator also fined EE £6.3m for overcharging more than 400,000 customers nearly £11 each. The company has accepted the ruling.
An EE spokesperson said: “We apologise to customers with discounted tariffs who paid more than they should have when cancelling their contracts early. We’ve already refunded customers and changed the way we calculate early termination charges, and we will continue to focus on ensuring our policies are clear and fair for all customers.’’
Commenting on the fines, Richard Neudegg, head of regulation at uSwitch.com, said Ofcom was sending a “serious message to all telecoms providers”.
“It is heartening to see the best interests of consumers being prioritised. In many cases, customers leaving their mobile or broadband contracts early are doing so due to circumstances out of their control, and there are already clear rules in place to prevent providers from overcharging when this happens.
“That almost half a million consumers have been hit by unfair fees by EE and Virgin Media is very disappointing but the scale of the penalties is a real warning shot for the rest of the telecoms industry.”