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Virgin could have broken Ofcom rules over early termination charges

Tuesday, May 22nd 2018 by Phil Wilkinson-Jones

Virgin Media is thought to have broken Ofcom’s rules on the issuing of early termination charges and could end up with a hefty fine from the regulator.

The provider is accused of charging early termination fees that were too high and requiring customers moving home to either sign a new contract or pay a fee to leave.

It is also thought that Virgin’s terms and conditions had become disincentives for people thinking of switching provider, and that it failed to publish clear and up-to-date information about termination fees on its website.

Ofcom has been investigating the matter since June 2017 and today said there are “reasonable grounds” for thinking Virgin had contravened its General Conditions, which apply to all communications providers and are there to protect consumers.

The regulator is expected to make a final decision in the case by the end of summer 2018 and could levy a big fine on Virgin if it sees fit.

In 2016 Ofcom fined Vodafone £4.6m after two separate investigations uncovered mis-selling, inaccurate billing and poor complaints handling procedures. Ofcom is yet to give an indication of the seriousness of Virgin’s alleged breaches, but the Vodafone case shows the regulator is willing to hit providers with sizeable fines.

Consumer rights

In today’s update, Ofcom also said it had been looking at terms in Virgin’s contracts that require customers moving home outside of Virgin’s network area to pay an early termination charge. This is despite the fact they are unable to continue to take Virgin services even if they want to.

Ofcom said the fairness of these terms does not fall within the scope of its General Conditions but it would continue to consider whether they raise concerns under the Consumer Rights Act.

Earlier this month, Ofcom opened an investigation into EE’s compliance with the rules surrounding early termination charges.

In particular, the regulator is looking at whether EE’s early termination charges were set out in a clear and easily accessible form, and whether it dis-incentivised customers from switching provider by not accounting for discounts given to customers on their monthly bill when calculating the charges.

Ofcom said it intends to complete the evidence-gathering stage of its investigation by August 2018.

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