EE and Virgin Media have been fined a combined total of £13.3 million by Ofcom for overcharging phone and broadband customers who chose to leave their contracts early.
Ofcom conducted an in-depth investigation into the early exit charges levied by two of the largest telecommunications companies in the UK – EE and Virgin Media.
Early exit fees are charges that are imposed should a customer wish to leave their broadband or phone contract before the end of the contracted term. It is within Ofcom guidelines that the exit fees should be made clear and not be too costly for the consumer to switch to another provider.
Ofcom made the following findings –
- Approximately 400,000 EE customers that ended their contracts early were overcharged. The total amount being up to £4.3 million in overcharged fees.
- Around 82,000 Virgin Media customers were overcharged when they ended their contracts early to the tune of just under £2.8 million.
Individually Ofcom fined EE £6,300,000 and Virgin Media were fined £7,000,000.
Ofcom’s Director of Investigations and Enforcement, 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 the 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 interests of their customers.”
As a result of the investigation and subsequent fines both companies have agreed to review their processes with regards to customers that choose to leave their contracts early so that they fall in line with Ofcom guidelines. Specifically Virgin Media have already reduced early exit fees by 30% and up to 50% in some cases.
The Ofcom investigation is an important step towards making exit fees for phone and broadband contract customers fairer at EE and Virgin Media and paves the way for customers to switch broadband when they are still within their contract without unduly excessive fees.