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Ofcom UK Finds Fault with Virgin Media Contract Termination Charges

Tuesday, May 22nd, 2018 (11:30 am) - Score 6,760
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An investigation conducted by market regulator Ofcom claims to have found “reasonable grounds for believing” that cable broadband ISP and TV operator Virgin Media may have broken its consumer protection rules by failing to play fair with their Early Termination Charges (ETC).

Most of the UK market’s largest broadband and phone providers will usually 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 (maximum) per month if you leave their broadband service before your contract is up (applies to the remaining months). Further details, including information on legacy packages, can be found here.

Virgin’s Early Disconnection Fees (Broadband)

Service Monthly charge
Fibre 20 (30GB Data) £10.00
VIVID 50 £13.00
VIVID 100 £13.00
VIVID 200 £19.00
VIVID 350 £24.00

However, last year a series of complaints from consumers prompted Ofcom to probe Virgin’s handling of ETCs (here and here) and to check whether or not they were being compliant with the related General Condition 9.3 rule. On top of that they also checked if the operator’s approach was “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).

Today the regulator has published their preliminary findings and concluded that Virgin may have breached their rules in several different areas.

Ofcom Statement

Ofcom has reasonable grounds to believe that Virgin contravened GC 9.3 by:

(i) setting and charging customers early termination charges (ETCs) which were too high;

(ii) requiring customers moving house to an area within Virgin’s network to sign up to a new fixed term contract or pay ETCs; and

(iii) failing to take action to ensure that its conditions and procedures for contract termination did not act as disincentives to its customers against changing provider.

Having reviewed the evidence gathered in the investigation, we also have reasonable grounds for believing Virgin also contravened GC 9.2(j) when it failed to publish on its website clear and up-to-date information about the ETCs payable when fixed term contracts are terminated.

Some consumers had also previously complained that it was unfair to charge them ETCs if they had Virgin Media and wished to retain the service but were moving to a new house that existed outside of the operator’s network area. Unfortunately Ofcom has today decided that this specific complaint “does not fall within the scope of GC 9.3,” although they are “continuing to consider whether these terms raise concerns … and we will provide an update in due course.”

A Virgin Media spokesperson said:

“We have received Ofcom’s provisional findings and we will now review them thoroughly.

We make it clear to customers that early disconnection fees can apply and we also offer 30 day rolling contracts for those that do not want to sign up for a minimum period, such as 12 months, and need more flexibility.”

The regulator has now given Virgin Media some time to respond and they expect to publish their final decision on this case by the end of summer 2018, which could potentially include a significant financial penalty.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he is also the founder of ISPreview since 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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28 Responses
  1. JamesMJohnson

    Hmmm even Sky will let you exit the contract if they are unable to provide the service.
    I moved from an FTTC area to a new build that didn’t get FTTC until a year later.
    They downgraded my connection to ADSL, rebated the difference and gave us a discount on a few other packages for staying with them.

    • Spurple

      In my experience, Sky is not cheap, but I generally trust them to bill me fairly when making mid-contract changes to my TV bundle.

  2. Rich

    When I moved from an FTTC to a Virgin area, neither Plusnet or Talktalk would let me do so without either re-contracting for 18 months at the new address, or paying off the entire remainder of the contract at full price.

    Talktalk in fact would not cease the line at all whatsoever for 30 days regardless of me paying them or not.

    Sounds like they are just as bad.

    • Jerry

      The same thing for my brother. Talktalk threatened with legal action when he spoke to them about the early termination fee as a result of moving address due to being a victim of hate crime.

  3. Joe

    Perhaps its juts me but if you want to terminate a contract early – sign up to a fixed contract knowing that there is a penalty – and break it I can’t see why you should not pay the contract terms. Yes I know the law now says (in effect) if you can’t be bothered to abide by contract terms so you shouldn’t have to suffered the consequences…

    • Jerry

      It’s all very well Joe that contracts are there in place but often times service promised is not delivered. When faults arise 9 times out of 10 the customer is to blame. The customer is threatened with an engineer call out fee if no fault is found even though there are intermittent problems.

      Consumers are asked to fault find as much as the provider when really broadband is a service. It should be the providers responsibility to provide that service and ensure that faults are rectified free of any further charges.

      It happens all too often that providers point the finger and I do accept that faults happen as a result of consumer error but the provider should talk through with the customer in a timely fashion (waiting an hour on the phone to speak to someone reading a script on screen does not suffice as support).

      A valid experience when I signed up I requested the broadband username and password as this was not sent to me only to be told I had to use their proprietary modem/router. Is this fair? I called again and asked if this was the case only to be told this was wrong information. However when asking for my broadband username and password I was told I can get it from the back of the router and when I said not the WiFi password I confirmed again I required the details to enter in the router gateway. The representative replied I can get it from the gateway when plugging it in. (of course this was a rather arrogant response and clearly shows that the rep wasn’t listening). I ended the call and called again this time a little more frustrated. 2 hours in so far of waiting and talking and still no further ahead. I had to clearly tell them before they even began to talk, that I didn’t require the WiFi password etc.. I was told that I would get what I need in 24 hours automatically after plugging in their router.

      In the end I enabled mobile data albeit a paltry ‘E’ I managed to find the information I needed and that was to phone an automated service which gave you the broadband username and password.

      It’s not so black and white as to why people want to leave contracts. The providers have way too much leeway in their terms of contract. Even to the point that they have 6 weeks to resolve an issue before a complaint can be acted upon. That’s a long time to put up with service that does not meet expectations set out in the contract.

    • Joe

      Clearly there is a big difference btween terminating a contract because they have not provided you with the product/service you ordered in which case free termination might well be valid (and ultimately lawful) and leaving because you got a cheaper offer. (which seems no reason why you should get out of termination charges)

    • Jerry

      At no point was price of service spoken about in regards to early termination of the contract. I just think that providers have far too much power. As previously mentioned, it’s unreasonable to expect consumers to wait lengthy periods of time for faults to be fixed. To be told that the onus is on the customer to pay for engineer visits shall the engineer not find a fault. It should be the responsibility of the provider to ensure the customer has done everything in their power to troubleshoot any faults in which case the question of the fee should not be brought up in the first place.

  4. DaveG

    I paid for 100mg download with Virgin Media the average on a good day was 50meg could only attain near the 100mg I was paying for if I was hard wired. Have many screen caps of DL speeds through the servers they recommend but get no where even with proof. These providers are now getting to big for their boots, even ending a contract at roughly the correct time is a failure, you get charged for one thing or another and they conveniently forget about the fact you paid in advance… All contracts should terminate automatically at the end of term with any provider, easy for them to contact you via email to ask if you wish to continue, not rely on you the customer to inform them 30 days in advance that you no longer wish to stay with them. They are abusing this situation with the elderly and people who’s memory is not so good. How about a person with dementia or Alzheimer who has their service set up by a family member or carer how the hell are they supposed to remember when the service is to terminate ????? do you think service providers are going to phone them up to remind them ??? havent seen any pigs flying lately have you ??? but I bet you would find many being charged out of their bank accounts for a service they are probably not using. Who are Ofcom protecting the provider or the customer I think they need to have far more powers to compensate for the absolute greed of many providers..

    • Alan

      “I paid for 100mg download with Virgin Media…”

      No like any service you paid for ‘upto’ 100Mb.

    • Gadget

      “could only attain near the 100mg I was paying for if I was hard wired”

      no point in testing connection speeds over WiFi- that was most likely the cause of the speed drop! You need to be using a wired connection.

    • Alex

      I’d be even more angry if my elderly relative had his or her service pulled without warning at the end of 12 months, then again the comment comes from someone who thinks they pay for a 1:1 connection and tests it via wifi, pretty much says it all.

    • John

      Virgin for me and the people I know hasn’t had those issues. May be the package as I have always been on the top packages including their gamer one they offered but my experience is that virgins speeds for me isn’t up to their my minimum when I was on 200 as that was the max I was getting about 220 on average and now on 350 it’s rare I dip below 400 it’s usually higher than that. My only gripe is the poor upload speeds that have always been capped at 25. I also put my superhub 3 into modern mode and bought my own router because that’s where your likely to run into issues their routers are beyond useless but for network speeds not had an issue. Since changing to my own router even WiFi gets min of 380 when close to router ofcourse.

  5. Kds

    I still have virgin trying to chase me for £83 for leaving early because through no fault of my own (change in landlord circumstances. Ie no longer wanted to rent out property) after saying to virgin that I was in rented accommodation and didn’t want a 12 month contract even if I was a 12 month contract they didn’t install for for over a month so would of been under anyway. I have tried to talk to them saying I would of stayed but my new address wasn’t served by virgin cable and they just said tough.

    • Carlos

      Sounds like there were bigger issues if you were booted out of rented accommodation in under a year. Unless of course if your rental agreement was shorter than 12 months in the first place, in which case it was silly to sign up to any ISP with contracts longer than your tenancy. Why should you be allowed out of a contract when it is no thought of the ISP? Perhaps everyone, rented accommodation or not or those that just decide to move home should also be let out of agreements just because after the fact they decide they do not like them?
      I have never heard so much ‘not fair’ snowflake nonsense in my life.

    • Alex Bristol

      Hi Carlos, your comments are very unfair to Kds, while my career is in IT I am also a landlord. Sometimes landlords maybe forced to sell or stop renting due to things outside their control like money funding issues with the mortgage, unprofitable, law changes, family member illness/disablement and so on, which is no fault of the tenant.

      You have my sympathy Kds.

    • Joe

      6 Month Tenancy is not uncommon. I don’t think its unreasonable to waive or the law to protect people where the tenancy is terminated (by the property owner) before the contract period.

    • Alan

      If you are in a contract to only have a roof over your head for 6 months or any other unstable period of time then perhaps it would had made sense to take Virgins 30 day contract packages rather than 12+ Month ones.

    • Jerry

      @Alan

      And be penalised by being charged higher prices? Why is that fair? Things beyond the control of both the tenant and the provider should be taken into account.

    • Alan

      1. It would not be higher prices overall as he is now having to pay to get out of the contract
      2. The “Monthly” rate is higher because you can leave at anytime after 30 days… Its call convenience, people in the real world expect to pay more for that
      3. It was not beyond his control, even more so if he knew he may not be at the premises for more than a year.

  6. Rob

    I just left. Keep getting letters about it threatening debt collectors but meh. Do your worst, Virgin. Should have offered better customer support that could understand detailed descriptions of my fault in English.

  7. rich

    Perhaps he should had gone with the 30 day contract option/s from Virgin if all those things are possible when renting. I doubt he wanted that though as it costs a little bit more per month.

    He wanted to pay less and now he wants to exit early for free? Get lost.

    I agree with Carlos. There is too much liberal self entitlement nowadays, well sorry but you are not special or more entitled to something more than anyone else is.

    • Spurple

      Good thing OFcom doesn’t care what you think.

      It’s one thing to change your mind, it’s another thing to move to an area virgin cannot supply you. Even on energy supply, you can leave penalty free if you move homes the understanding being that moving home is not a light undertaking that people take on a whim.

      Good to see finally Virgin Media paying back for onerous contract terms.

      Just because you can put it in the contract doesn’t make it valid.

    • Alan

      “It’s one thing to change your mind, it’s another thing to move to an area virgin cannot supply you.”

      From the original posters quote above…
      “I have tried to talk to them saying I would of stayed but my new address wasn’t served by virgin cable and they just said tough.”

      and from the news item and what ofcom say…
      “Some consumers had also previously complained that it was unfair to charge them ETCs if they had Virgin Media and wished to retain the service but were moving to a new house that existed outside of the operator’s network area. Unfortunately Ofcom has today decided that this specific complaint “does not fall within the scope of GC 9.3,””

      So no Ofcom do not disagree with rich in fact the opposite.

      It also states at the end of the news item Ofcoms final decision is not due until the end of the summer.

    • Spurple

      Whatever you say boss. I look forward to the fees going down anyway.

    • Alan

      Ofcom may well reduce the exit fees, but they will still exist……. like they do for basically any provider you care to name where if you leave within your contract period you are expected to pay to leave.

  8. David Gould

    Alex: I think you need to read what I said with reference to finishing contract to all people at the end of term, They could easily email you to let you know when they were about to pull the plug, that is what I said. You are also I assume not elderly and have never cared for a family member with dementia or altzimers. They rely on you as the carering family member to keep track of all of their bills, services and health. You also have to look after you own business and try to live some resemblance of life, so until you have been there don’t get so angry over something you have never experienced, which I have ………… getting a message that tells you your contract is about to renew and needs your attention is no biggy in life believe me. I would save the companies being able to keep you on contract for ever and a day if you have no recollection of dates. Hope you or someone you have to care for doesn’t end up with such a destructive illness or you will very soon see what I mean

    • Alan

      So much concern and rightfully so for those with a terrible illness which robs a person of memory……….. Impressive they can remember the password for the supposed wifi you setup and moaned about though eh? Or maybe they could not and you just wanted them to rely on you even further.

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