A fine of £13m has been imposed by Ofcom on two UK companies Virgin Media and EE for allegedly charging more than required from those customers who made early cancellations of their phone and broadband contracts.
Soon after the announcement of the fine by the telecom regulator, Virgin Media called the fine to be “unreasonable, unjustified and disproportionate” and announced its decision to appeal against £7m fine. A smaller fine of £6.3m fine was however imposed on EE even though the company was held reasonable for excess charging maximum (80%) of the 500,000 customers impacted by the actions of the both the companies. this was because the regulator had decided to reduce its initial £9m fine by 30% to “reflect that EE admitted the breaches and agreed to settle the case”.
The allegations against both the companies was that they had violated consumer protection regulations as their customers were clearly informed about the amount of charges that they would be required to pay if the decided to prematurely terminate the contract, Ofcom said, and added that the companies also levied “excessive” fees for consumers to leave.
Excessive billing was done by EE on 4000000 of its customers who decided to terminate their contracts before time which resulted in a total excessive payment of £4.3m according to the investigations made by the watchdog.
On the other hand, a total of under £2.8m, an average of £34 per customer, was reportedly overcharged by Virgin Media from almost 82,000 customers. However, more than £100 was over charged from 6,800 of those Virgin Media customers. the company was charged an additional £25,000 in fines for “providing incomplete information” to Ofcom.
“Those people were left out of pocket and the charges amounted to millions of pounds. That is unacceptable. These fines send a clear message to all phone and broadband firms that they must play by the rules, in the interests of their customers,” said Ofcom’s director of investigations and enforcement, Gaucho Rasmussen.
Ofcom’s ruling was “unjustified and disproportionate” and the company would immediately lodge an appeal against the decision, said Tom Mockridge, the chief executive of Virgin Media/
“We profoundly disagree with Ofcom’s ruling,” Mockridge said. “This decision and fine is not justified, proportionate or reasonable. 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. We will be appealing Ofcom’s decision.”
The company had already refunded, with interest, all those consumers who had left the company before the end of the contract, between September 2016 and August 2017, said Virgin Media. The company had made donations to charity with the excess money of those customers that it was unable to locate.
“We accept Ofcom’s findings and recognise that we have made a mistake,” a spokesman for EE said. “We apologise to customers with discounted tariffs who paid more than they should have when cancelling their contracts early. We’ve already refunded customers and changed the way we calculate early termination charges, and we will continue to focus on ensuring our policies are clear and fair for all customers.’’
(Adapted from TheGuardian.com)