EE and Virgin Media fined £13m for ‘unacceptable’ overcharging
REGULATOR Ofcom has fined EE £6.3m and Virgin Media £7m after an investigation into early-exit charges revealed they were overcharging their phone and broadband customers who wanted to leave contracts early.
Ofcom found that around 400,000 EE customers with recurring monthly discounts were overcharged for ending their contracts early, which saw customers overpaying up to £4.3m. Nearly 82,000 Virgin Media customers were overcharged a total of just under £2.8m.
Companies are entitled to charge those who decide not to see out the minimum term of their contracts, but under Ofcom rules, these charges must be made clear to customers, and must not make switching to another provider too costly. The watchdog said that both EE and Virgin Media “failed to comply with these rules”.
Gaucho Rasmussen, Ofcom’s director of investigations and enforcement, said the overcharges were “unacceptable”. He added: “These fines send a clear message to all phone and broadband firms that they must play by the rules, in the interests of their customers.”
As a result of the investigation, EE – now owned by BT – has volunteered to conduct an in-depth review of its business to help secure future compliance with Ofcom rules.
A spokesman for EE admitted that the company had “made a mistake”.
“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,” EE said.
But Virgin Media has vowed to appeal against Ofcom’s decision. Tom Mockridge, chief executive of Virgin Media, said: “We profoundly disagree with Ofcom’s ruling. 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.
“As soon as we became aware of the mistake we apologised and took swift action to put it right by paying refunds, with interest, to everyone affected.
“For those few people we could not locate, we have made an equivalent donation to charity.”