VIRGIN Media and EE have been fined a combined £13.3 million by regulator Ofcom for overcharging nearly 500,000 phone and broadband customers who wanted to leave their contracts early.
Ofcom said both companies broke consumer protection rules by failing to make clear the charges customers would have to pay if they ended their contract early and levying “excessive” fees to leave.
The watchdog’s inquiry found around 400,000 EE customers who ended contracts early were overcharged, with customers overpaying a total of around £4.3m.
It added that almost 82,000 Virgin Media customers were overcharged a total of almost £2.8m.
Ofcom has fined BT-owned EE £6.3m and Liberty Global’s Virgin Media £7m.
Phone and broadband firms can charge customers who decide to leave their contracts early, but under Ofcom rules, those charges must be made clear to customers, and must not make switching to another provider too costly.
Gaucho Rasmussen, Ofcom’s director of investigations and enforcement, 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.”
Both companies have since agreed to change their terms and reduce exit charges, Ofcom said.
But Virgin Media vowed to appeal against the decision and fine, which it said was “unjustified and disproportionate”.
It said only 1.5% of its 5.5m cable customers were affected.
Tom Mockridge, chief executive of Virgin Media, said: “”This unreasonable decision and excessive fine does not reflect the swift actions we took, the strong evidence we have presented, or our consistent, open and transparent cooperation with the regulator.”
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