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Complaints Prompt Probe of Virgin Media’s Contract Cancellation Charges

Wednesday, June 28th, 2017 (11:58 am) - Score 14,672
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A string of consumer complaints have today prompted Ofcom to launch a probe into Virgin Media’s contract cancellations policy, which will examine whether or not the cable broadband, phone and TV provider has been playing fair when applying Early Termination Charges.

Nearly all of the market’s largest broadband and phone providers will levy some form of Early Termination Charge (ETC), which applies to customers that choose to exit their contract before the current term has come to an end (Virgin calls these Early Disconnection Fees). For example, this is how much Virgin Media charges per month if you leave their broadband service before your contract is up (applies to the remaining months).

Virgin’s ETC for Broadband

Service Amount charged per month
Fibre 20 (30GB Data) £16.50
Superfibre 50/70 £21.50
VIVID 100/150 £26.50
VIVID 200 £31.50
VIVID 200 Gamer £34.00
VIVID 300 £36.50

However Ofcom has received complaints about Virgin Media’s handling of ETCs and thus the regulator has decided to probe whether or not the operator is compliant with their General Condition 9.3 rule. On top of that they will also check if the operator’s approach is “unfair” under Section 62(1) of the Consumer Rights Act 2015 (CRA).

The GC9.3 rule is designed to “ensure that the conditions which apply if you terminate your contract don’t disincentivise you from changing to a new provider, e.g. through excessive early termination charges.” Meanwhile Section 62(1) of the CRA states that an unfair term of a consumer contract is not binding on the consumer (this means provisions within the contract itself).

A Virgin Media Spokesperson told ISPreview.co.uk:

“We note Ofcom’s investigation into early termination charges and will work with them during the course of their inquiry.”

In addition, the regulator has also launched a new monitoring and enforcement programme that will look at whether other ISPs are making mistakes in the same area (here).

Ofcom’s Statement

Ofcom receives a large number of complaints about ETCs from consumers trying to exit their communications service contracts. Complaints indicate that some consumers are unclear about the circumstances in which an ETC can be charged and question whether such charges are fair.

Our objectives for this programme are:

* To ensure that CPs are taking appropriate steps to make consumers aware of any applicable ETCs when they are signing up to a minimum contract period; and
* To ensure that terms and conditions imposing ETCs on consumers comply with GC9.3 and are fair for the purposes of the CRA.

Under this programme, we will collect information from relevant sources, including CPs, and review relevant consumer complaints data, in order to assess compliance and take any action as appropriate.

Where we identify specific issues in relation to ETCs, we may initiate separate investigations of named providers. Where we do so, these will be announced via our Competition and Consumer Enforcement Bulletin.

At this stage there’s very little solid information to go off, although it’s worth pointing out that Virgin Media have recently introduced the option of monthly (30 day) contract terms for those who don’t like being tied down for longer (here). The disadvantage of a monthly contract is that you have to pay more to receive the same service, while longer contracts tend to be cheaper but can carry nasty caveats like ETCs.

However feedback from some of our readers suggests that Ofcom might possibly be taking issue with the fact that Virgin Media also charges ETCs when customers move house but are then unable to provide the service at the new property (e.g. because their network is not present).

In other cases customers claim to have cancelled after the operator broke their own contract through incorrect billing or other reasons, although despite this Virgin Media then continued to levy ETCs. We should learn more if the regulator decides to press ahead with a full investigation, although this process could take awhile.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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46 Responses
  1. Avatar PaulM

    Don’t all the providers do the same?

    • Avatar Dan Spurr

      sweet innocent summer child, you should see the bill of £376. i got from Origin broadband.

      a company that couldn’t provide within estimates of speed 13mbps-17mbps provide 10.69mbps throughout the night of activation 11 hours later after calling tech support at 11pm (and speaking to a human who couldn’t help.) i cancelled and made a new arrangement with BT for asap (15 days later) Origin tried to bill me for a modem/router i had already returned to them and they had signed for. then after a second call to origin i found they hadn’t cancelled my account after the first call, so i finally got the cancellation invoice 2 weeks ago for £376. on an £18.99 a MONTH No Calls,BROADBAND only package for 12 months. they did come down to £250 but demanded an initial payment on the phone of £150 that I didn’t readily have so I used a newly recieved BT signup reward (prepaid) mastercard and i have a further £100 to pay this Friday

      The OFCOM standards of practice relating to Speeds provided should be mandatory.

      if a company can’t provide speeds estimated on there sign at time of signup (which you should screenshot for records) then it’s a breach of contract and you should only have to pay for time used or time used until the new provider can come online.

      these companies shouldn’t be able to make a profit on there garbage service.

    • Avatar PaulM

      Link to the product you signed up for?

    • Avatar Terrier barett

      We had Virgin media up until we moved last year to a property they do not supply . I notified them of our move and was told basically tough luck you still get to pay for it . In my opinion they can no longer provide the service therefore cannot hold me to the contract . anyone else had similar problems?

    • Avatar Dan Spurr

      http://i.imgur.com/EZyEVqJ.jpg

      It’s this one , if you go to Openreaches where and when map for superfast rollout and use LN5 7TR you’ll see how close the cabinet and exchange are to my building. They even claimed the last time on the phone that my estimated DOWN speed as 7mbps through ADSL yet that screen grab shows 17mbps package after inputting Landline and Postcode which is really only available through ADSL2 or now I’m back with BT ANNEX M delivering it’s max of 25mbps.

      Origin are con artists

    • Avatar Geoff

      Virgin have breached my contract after agreeing a 12 month contract where my price was supposed to be fixed for 18 months! They even openly admitted that they broke the contract & told me i had a 30 day cooling off period, so i’ve decided to ditch them. Can’t trust any company that breaches it’s own contracts. They said my last payment will be on 15th October & my internet will shut down on 2nd November which seems odd cuz i paid a month in advance. They then said I would get a cheque in the post 35 days later ??? Strange huh

  2. Avatar DTMark

    If I sign up to a contract for a service, and I willingly sign up for a year at, say, £30 per month, then I am signing a contract worth £360: that is my side of the bargain. I should not assume anything else.

    In return the provider will provide a given service with the particulars as stated, not limited to add-on features and certain performance. At that price.

    If I decide I want to breach said contract, I should assume that I shall pay £360 minus what I have paid so far. It is my choice to go elsewhere.

    During the term of the contract the provider cannot change any of the particulars including the price. That is already legislated for.

    Except there’s nothing to stop the provider “trying it on” and it works in their favour. I can choose to give the provider what they ask, or, not. They may ask but they may not insist. Seemingly something people really don’t understand.

    If I choose not, the provider, for some reason, is then allowed to end the contract themselves.

    Contract is between the consumer and the provider. I don’t see why this basic established principle of contract needs a mother figure to preside over it.

    If I choose to sign up for 18 months to get a better price, that’s my decision. Nobody forced me to do that. I have to accept the consequences.

    If the regulator wants to “do something”, then ban the provider from changing the contract particulars or even trying to do so, and more widely publicise the get-outs for the consumer with respect to poor performance. In this industry it wouldn’t be a bad idea for that information to display in a prominent box on the screen at point of sale alongside the estimates.

    • Avatar Peter McHugh

      I note your support of virgin media and ask you do accept that this is not the actions of someone who believes that contracts apply to both parties in as much they don’t issue bills and then expect them to be paid the day previous

    • Avatar DTMark

      I have literally no idea what that comment is trying to convey.

      I do recall that twice when we’ve had BT accounts in the distant past we used to get bills which were due for payment the day before they arrived.

      The levying of, and our refusal to pay, late payment charges, was the reason that both accounts fell into dispute and the contract was terminated.

      But that doesn’t have much to do with the above.

  3. Avatar PaulM

    A bit puzzling why they are also looking at “Meanwhile Section 62(1) of the CRA states that an unfair term of a consumer contract is not binding on the consumer.” Virgins max contract length for its residential products is only 12 months, some providers its 18 months.

    I do not see much coming of it and if it does i suspect others could end up in le merde a whole lot more.

    • You’re confusing term (length of time) with the other kind of term (provisions of the contract / T&Cs). S62(1) is all about the terms of the contract itself, not necessarily how long it lasts.

  4. Avatar dragoneast

    Ofcom seem to me to be, in many ways, the maker of this complicated weave, by their constant meddling. Of course it’s more than anything else intended to deceive, that’s inevitable. Why not just make it a rule that rolling contract terms cannot be longer than one month? No need for additional get-outs and payments, and comparisons become simple – just price and usage caps. And ban “all in” bundled services whilst they’re at it, you just buy the services you want at individual prices. Less deals but that’s a good thing – we have to pay for it, somehow, or someone else does.

    The only losers might be sites like this I suppose, who’d lose half their business, but that might be no bad thing either!

    You can’t simplify the market and make it more complicated at the same time. All you end up with is a mess.

    • Avatar ian

      Exactly, there should only be one month contracts. The only reason people would want to leave is when the service fails to meet expectation, most of the time. yes theres poor budgeters who can’t afford it ( that should be a solved with sort contracts) and if the service isn’t up to scratch then they can leave after a month. Its pretty criminal how poor speeds and malicious ISP hold customers ransom over contracts when the broadband they off is very poor.

    • Avatar CarlT

      I should mention I speak as someone on a rolling monthly FTTC contract. Wires only, no router, I paid about 50GBP in set up charges for a simple migration and pay considerably more per month than the average FTTC cost.

      I find it unlikely that Joe Average who buys from TalkTalk or BT would be enthusiastic about paying more for flexibility and far more likely they want to pay less and contract.

  5. Avatar adslmax Real

    Never liked 12, 18 or 24 months contract terms, don’t believe in this! Should be BANNED by Ofcom soon. We all want roll on monthly by monthly terms. That’s go for Mobile phone, Phone Line, Fibre Broadnand, Cable Broadband, Cable TV, BT Sports TV and Sky TV etc.

    • Avatar DTMark

      There is a choice of providers with different terms, so if flexibility is more important than price, you can choose exactly that.

      Choose to sign up for 18 months and the provider can give a better price as they have the certainty of that income.

      Or sign up for month-to-month and pay a little more, knowing you can leave when you want.

      Or, have the latter enforced so that every provider has to do it, and then everyone has to pay more.

      The current state of affairs seems like the best option.

    • Avatar ultraspeedy

      I do not see the issue myself. As mark states the market has various options from 1 month to 18 month contracts, pick what you want. Banning 12 month contracts or just wanting 30 day rolling ones will do nothing except achieve price rises, which the same people will then moan about.

      Its weird they are looking at Virgin, as the news item points out they have 12 and 1 month contract options, so not even sure how their contracts could be unfair.

    • Avatar CarlT

      That happens there would be no loyalty’ discounts anymore. You’d have to pay a higher monthly charge and a set up fee.

    • Avatar ultraspeedy

      Yep agree with you Carl setup fees would also likely rise. Its a shame so many think about money saving in the short term.

    • Avatar Steve Jones

      Ofcom have an incentive to prefer long contracts with entry discounts as they (like most market regulators) use “customer churn” as one of their key measures of a working market. Hence they like products with deep discounts for new customers and minimal connection fees as it encourages just this customer turnover. For ISPs that only works with long contracts.

      Of course it’s a pain to continuously change contracts are things which can go wrong.

    • Avatar ian

      exactly, 12+ month contracts are ridiculous.1 month rolling contracts, so people don’t buy what they can’t afford and can leave if the service isn’t up to scratch.

      Its abused too much by ISP that hold customers to ransom if they have a bad service.

    • Avatar CarlT

      As previously mentioned there would be set up charges leaving people unable to move as they would be unable to afford the set up charges for a new provider.

      ISPs tried eating set up charges and offering services with no contracts in the very early days of ADSL. They quickly found themselves being used to get connected to ADSL, then people would migrate after a little while to a cheaper ISP and the original one lost money on the initial provide.

      In these days of ISPs having set up costs in terms of routers, sometimes initial install, etc, in some cases it’s even worse.

      If someone wants to move to VM or a future FTTP provider and there’s no contract how much do you think it’s going to cost to deliver service to a previously unconnected property, install network termination, and provide any CPE that are needed?

      ISPs could offer them but they would come with steep set up charges and higher monthly charges. What are the odds of them seeing any real take up?

  6. Avatar MP

    So, as a long term (over 5 years) customer in a rented property (where I’ve resided for 12 years) we take a 12 month contract in exchange for a price reduction. Unexpectedly, the landlord decides to sell the property so at the end of the 12 month rental contract we’re out. Virgin Media are unable to provide service at the new location.
    Which is the fair resolution to this:
    A) the full (capped) ETC of £240.00
    B) an ETC of the difference between the price of the service paid and the price that would have been charged if a new 12-month contract had not been entered into.

    Note that the legislation (not Ofcom) says that ETCs that are excessive in terms of the cost to the supplier are illegal (for consumer contracts). This, I would say, is demonstrably the case for a customer of 5+ years’ standing.

    • Avatar ultraspeedy

      “…we take a 12 month contract in exchange for a price reduction.”
      “…Which is the fair resolution to this:”

      That you are treated the same as anyone that took a new contract to save money.

    • Avatar MP

      So, is that A or B from the offered options?

    • Avatar DTMark

      12 month contract @ 20/month is worth £240.

      Thus you owe £240 for your 12 months of service, you agreed to pay that.

      If you leave before the end of the 12 months then you owe £240 less what you’ve paid up to that point.

      .. is my interpretation of what is ‘fair’. I don’t see any other pertinent factors that affect that.

    • Avatar MP

      Rephrase that as “The inability/unwillingness/commercial decision of the supplier to offer service at my new location force me to leave” – and does it still seem fair ?

    • Avatar DTMark

      Yes, because it was your decision to commit for 12 months, and it was also your decision to move to an area that isn’t serviced by their network.

    • Avatar CarlT

      A). You committed to a contract, taking VM services for a year at x property. Regardless of why you took the contract you’ve broken it.

      A case could be made for B) but that would need to be clarified.

    • Avatar PaulM

      “The inability/unwillingness/commercial decision of the supplier to offer service at my new location force me to leave”

      How on Earth did you sign up for a 12 month contract if their is no product available at your address? If you are trying to say because you moved and were in contract you had to pay the remainder of that contract then YES that is fair of them to charge you. If you do not like it in future dont sign up to 12+ month contracts for your broadband.

      Frankly i find it hilarious people sign up to things thinking ooooooh thats cheap, and then cry when they discover why it was cheap rather than carefully reading terms in the first place. Contracts are not the problem… Some people are.

  7. Avatar Elizabeth Crobshaw

    I took a 12 month contract , at £45 per. Month after the 5th months do paid near,y £900 !!!! I constantly rang them complaining . No recourse , I cancelled I be month eat,y !! They said I was tied in for 18 months ! !!! All in all they are now pursuing me for 450+ I’m not paying it , hope this investigation will help all people like me

  8. Avatar Dennis Tate

    One thing everyone is overlooking which is with Virgin Media, if there is a price increase later within your contract you can leave without any penality fees by giving notice. CHECK IT OUT.

  9. Avatar joe joe

    i also had the misfortune of signing a contract with virgin .been told to wait for engineers to turn up on the friday for a preconnection visit and expect the router and broadband to arrive in exactly a fortnight.engineers never came on the friday and neither the broadband nor router came when promised knowing i had to stay indoors the whole day to sign for the parcel .end of the day i called their rep Sunny and instead of apologizing he was very arrogant and told me virgin broadband was the best in the country and i had simply to wait .i was furious i called his office a dozen times and my calls were ignored or answered and phone put down straight away .when i got lucky a young lady refused to terminate the contract and told me to wait i asked how long and she replied not long 6 weeks ! i said that i am cancelling my direct debit and want to talk to a manager.was told no manager or supervisor were available to talk to me and would not promise me tjat they would call either .if i were a potential customer i would avoid them like a plague.

    • Avatar ultraspeedy

      http://www.virginmedia.com/shop/the-legal-stuff/terms-and-conditions-for-fibre-optic-services.html#ending
      clearly explains the situation for people such as yourself. Very straight forward to cancel before you have even got the product.

    • Avatar ian

      Yeah virgin are terrible and abuse their position. Contracts seem to just protect virgin, bad service, so sorry you cant leave. poor customer service, sorry you cant leave. 12 month contracts are used as a method of coercion by certain ISPs and it should be put to a stop. If the service isn’t as advertised quick exit methods should be offered but i don’t think they ever will make it easy to leave, so i dont think they should have the option to abuse their position anymore.

    • Avatar PaulM

      Yet Ofcom get little complaints from them, so perhaps service quality isn’t the problem.

    • Avatar ian

      i didn’t complain to ofcom either. many people dont.

      I just left the service, after speaking to the ombudsman and expressing to virgin that i had recorded them so id take them to court if they wanted further action. Ofcom was the last thing on my mind.

    • Avatar alan

      “i didn’t complain to ofcom either. many people dont.”

      Id argue that with hundreds of complaint calls for the big ISPs to Ofcom each day many people actually do. Then again you have probably been through ISPs like an raging hot knife through butter.

    • Avatar ultraspeedy

      “Contracts seem to just protect virgin, bad service, so sorry you cant leave. poor customer service, sorry you cant leave. 12 month contracts are used as a method of coercion by certain ISPs and it should be put to a stop.”

      What are you talking about? Virgin have 30 day contract options.

  10. Avatar Sledgehammer

    I think what Ofcom should do is insist that every ISP offers 1 month contracts as well as what they offer now.

  11. Why do I pay £31.24 per month for 50 me Broadband only. No tv. No phone?

    • Avatar PaulM

      1. What was the quoted price when you signed up?
      2. Have their been any prices increases?
      3. Are you still in contract?
      4. Pay £1 more and you could have 100Mb.

      Ah the joy of options and confusion.

    • Avatar NP

      Because you pay more for NOT having a phone.

      Don’t ask.

    • Avatar alan

      Which makes sense as if a company can get your line rental business also that means more money in their pocket over the contract period + the calls you make in that period. Maths its confusing.

  12. Avatar Dean

    Hi all, I have a similar issue to some whereby I am moving and virgin cannot provide the service and have requested full payout. I only rented the place for 6 months and one would assume you take the service with you. I have tried discussing with them many times but still they say T&Cs. If I read every T&Cs I would not have time to live!! It would be fair to assume that a large company would not have such unfair conditions and hence not read the T&Cs. Also the sales people should explain this fact particularly when it is a rented dwelling for 6 months!

    Anybody got any advice on how to go with this?

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