Online banking failures unacceptable

16 Nov 2018

Ofcom fines EE and Virgin Media £13.3 million

EE and Virgin Media have been fined £13.3 million by telecoms regulator Ofcom, after an investigation into the two companies revealed that they were overcharging customers who wanted to leave their broadband and phone contracts early.

Ofcom, the regulator, said nearly 500,000 customers had been overcharged, leaving them “out of pocket”.

Both companies were accused of breaking consumer protection rules by, failing to make it clear to their customers the charges they would encounter for leaving their contract early and levying “excessive” fees to leave.

Around 400,000 EE customers, who ended contracts early, were overcharged £4.3 million in total and about 82,000 Virgin Media customers were overbilled approximately £2.8 million.

Under Ofcom rules, telecommunication companies must clarify the charges a customer will encounter if they choose to leave their contract early and must not make it too costly for them to switch to other providers.

Director of investigations and enforcement at Ofcom, Gaucho Rasmussen, said:

“EE and Virgin Media broke our rules by overcharging people who ended their contracts early.

“Those people were left out of pocket and that charges amounted to millions of pounds.

“That is unacceptable. These fines send a clear message to all phone and broadband firms that they must play by the rules, in the interest of their customers.”

Tom Mockridge, chief executive of Virgin Media, commented:

“This decision and fine is not justified, proportionate or reasonable. A small percentage of customers were charged an incorrect amount when they ended one or more of their services early and for that we are very sorry.”

EE too apologised for their mistake. A spokesperson for the company remarked:

“We’ve already refunded customers and changed the way we calculate early termination charges, and we will continue to focus on ensuing our policies are clear and fair for all customers.”

Ofcom has stated that since being fined, both companies have agreed to change their terms and reduce exit charges.

By Lyba Nasir