Communications regulator Ofcom deemed the charges “excessive”
EE and Virgin Media have been fined £13.3 million in total, for exorbitant contract cancellation fees.
When you leave your phone or broadband contract before it’s over, you’re liable to pay a cancellation fee. However, EE and Virgin Media have, apparently, overcharged customers to the tune of £7.1 million in total over six years.
An investigation by UK communications regulator Ofcom found that the companies had overcharged 500,000 customers with cancellation fees. In addition, Ofcom alleges that these fees weren’t clear to consumers, so Virgin Media and EE also broke consumer protection rules.
In total 400,000 EE customers were overcharged around £4.3 million, resulting in a £6.3 million fine for the company. The overcharging came from EE offering discounted contracts to customers, yet processing cancellations as if they weren’t on these discounted contract rates.
The 82,000 affected Virgin Media customers overpaid by £2.8 million, due to the company charging higher cancellation costs than advertised. The high cancellation costs also disincentivise customers to change providers, which is against Ofcom’s rules. Because of this, Virgin Media was hit with a £7 million fine, totalling £13.3 million in fines for the two companies.
The stark differences between affected customers could be down to the fact that Ofcom has been investigating EE for six years, whereas the investigation only explored Virgin Media for one year between 2016 and 2017.
While both companies have promised to change terms and fees in light of the fine, Virgin Media has stated it is to appeal the decision.
The company alleges the overcharging was only a mistake that affected a small number of customers, and that therefore the large fine was disproportionate. It also stated it has already paid refunds to the affected customers, however, EE has not yet confirmed if it will follow suit.