Ofcom Hit Virgin Media UK with £28m Fine for Preventing Contract Cancellations UPDATE

Broadband, phone and TV provider Virgin Media (O2) has today been fined £28 million by Ofcom after the UK telecoms regulator found that they had made it difficult for customers to cancel their contracts. Millions of customer calls were said to have been “deliberately mishandled, creating unnecessary barriers to switching or cancelling“.

Readers with long memories might recall that this investigation started all the way back in 2023 (here), after some customers who tried to leave said Virgin Media had made it difficult. Some struggled to get through to an agent on the phone, while others found their call was dropped mid-way through or were put on hold for long periods. And many said they had to make lengthy and repeated requests to cancel, as their initial request was not actioned.

At the time Ofcom warned that such an approach could conflict with their rules (e.g. General Conditions C1.8 and C4), which clearly state that the conditions or procedures telecoms providers have in place “must not act as a disincentive for customers who wish to cancel their contract“.

The regulator’s investigation was also setup to examine whether the ISP had failed to meet their requirements on complaints handling, such as whether customers were appropriately informed of their right to escalate their complaint to an independent ombudsman (Alternative Dispute Resolution – ADR – provider, such as Ombudsman Services or CISAS).

Ofcom’s Verdict

The regulator said they had received “significant volumes of complaints” (1,881) over the issue and that their investigation uncovered “systemic and repeated failings” in Virgin Media’s contract termination procedures. Millions of calls made by customers between 1st January 2022 to 11th September 2024 were “likely to have been mishandled by call agents in order to delay or prevent customers from cancelling and switching to a competitor“. This was just before Ofcom’s new One Touch Switching (OTS) process was introduced for broadband and phone migrations.

Ofcoms Full Statement

We opened our investigation following significant numbers of complaints from Virgin Media customers about difficulties cancelling in calls with agents. As a result of our investigation, we have found that during the Relevant Period Virgin Media had in place procedures for contract termination which likely acted as a disincentive to switch for customers on millions of calls by delaying or preventing them from taking advantage of a competitor’s offer. Specifically:

Under Virgin Media’s procedures, callers who wanted to cancel were put through to its retention team, which it split into two ‘tiers’ of agents. Only agents in the second tier were able to process cancellations. This meant that callers who were initially put through to an agent in the first tier would then need to repeat their request to cancel in another similar conversation with an agent in the second tier, in order to stand a chance of having their cancellation processed.

Virgin Media’s internal processes or procedures involved or resulted in agents engaging in the following behaviours:

a. repeated attempts to try to retain customers including by offering deals and discounts, when they had made it clear they wanted to cancel.

b. unnecessary and/or excessive transfers to agents in departments outside of the retention team.

c. excessive and/or repeated use of hold (in each case, where it was not necessary and/or used to delay or avoid a disconnection).

d. deliberately dropping calls.

e. failures to put through cancellations on the system.

We found that Virgin Media’s procedures allowed and encouraged these agent behaviours by having:

➤ a commission scheme which effectively encouraged and financially rewarded agents for preventing customers from switching by using the above behaviours, only reducing payouts in limited circumstances;

➤ training and guidance which failed to prevent the above behaviours, including by not setting clear behavioural expectations or instructing against the use of these behaviours in mandatory training;

➤ quality assurance and monitoring processes which were highly selective and narrow in their approach such that the above behaviours were often overlooked. Even where these behaviours were identified, follow-up action was often very limited; and

➤ insufficient control, visibility and/or oversight over the third-party partners it used to operate its call centre and quality assurance monitoring functions.

We consider this to be a serious breach of our rules, resulting in customers suffering harm as a result of being disincentivised from switching. This harm took a number of forms, including financial loss, inconvenience, frustration, and increased stress and/or anxiety. Taking account of all relevant factors, we are imposing a financial penalty of £28 million on Virgin Media. This penalty was set having regard to our Penalty Guidelines and includes a 30% discount as a result of Virgin Media’s admission of liability and its completion of Ofcom’s settlement process

As if to make matters worse, Ofcom took into account the fact that Virgin Media had “[repeatedly failed] to act to identify and prevent the harm” and that it had also repeatedly failed to comply with their information gathering process during the investigation. Not to mention that Virgin had been fined previously for a breach of the same rule in 2018.

Natalie Black, Ofcom’s Group Director, Infrastructure and Connectivity, said:

“The facts are clear. Virgin Media made it harder for customers to cancel their contracts and then did not fully cooperate with our investigation. As a result, we are levelling our largest ever fine under our consumer protection rules for direct harm to consumers.

Today, we are sending a clear message that any provider who wilfully acts against the interests of their customers will pay a heavy price. And by introducing the One Touch Switch Process, we‘ve put in place further safeguards to prevent this from happening again.”

Ofcom’s financial penalty is said to include a 30% reduction after Virgin Media “admitted its failing and agreed to settle the case“. The regulator highlights that Virgin Media has made a number of important changes since the issues, including to improve its commission scheme, training and quality assurance and monitoring. In 2025, complaints to Ofcom relating to ‘difficulties leaving’ fell by 89% compared with 2023.

However, as part of their decision, Ofcom are now requiring Virgin Media to check that every affected customer who complained has received the compensation or other remedies they were entitled to. The company must complete this in six months. The operator must pay the £28m fine within two months of this decision, and as usual it will then be passed on to HM Treasury.

Finally, in terms of the complaints handling (ADR) side of this investigation, Ofcom opted to engage Virgin Media separately over those aspects and this engagement is said to have secured a number of improvements, “including to ensure appropriate recording of and closure of complaints, and ensure vulnerable customers who make complaints are treated fairly“. 

UPDATE 8:33am

Virgin Media has responded to today’s decision and highlighted how the investigation relates to historic failings that have since been addressed. The operator added that all formal complaints from his period have been resolved, and their customer service is in a very different place today.

The operator also noted how Ofcom’s findings referenced millions of calls where customers “likely” experienced difficulties when trying to cancel. But they highlight how this is an extrapolation largely based on 649 core complaints, while many of these millions of customers may have simply been looking to discuss a new deal etc.

A Virgin Media spokesperson said:

“We’re committed to giving all our customers great service and apologise to the small proportion who experienced an issue when contacting us to agree a new deal or cancel their service in the past.

We have completely redesigned our customer services in recent years, addressing the historic shortfalls identified by Ofcom through a number of improvements, and have resolved all formal customer complaints from this period providing redress where appropriate.

Our customer service turnaround strategy, underpinned by significant investment, has been transformational. Ofcom’s latest data shows that Virgin Media is now the least-complained-about broadband provider with complaints at record lows, and complaints specifically relating to ‘difficulties leaving’ were 89% lower last year than in 2023.

With One Touch Switch now in operation across the industry, and a wide range of competitive deals and services available, it’s never been easier for customers to choose the right package for them.”