UK mobile and broadband networks EE and Virgin Media have been dealt massive fines after Ofcom found it subjected customers to unfair early contract termination charges.
Combined, the two carriers, overcharged nearly half a million customers, at a cost of £7.1 million. Ofcom found 400,000 EE customers overpaid at a cost of £4.3 million. However, Virgin was perhaps the worst offender, overcharging 82,000 customers a staggering £2.8 million. That’s a much higher average charge (£34) per customer.
That has been reflected in the fines dished out by Ofcom. Virgin must pay £7m and EE £6.3m. EE’s fine is also reduced because it was able to get £2.7 million back to customers after the “miscalculation” of the termination fees due.
The fines come, in part, because the two companies failed to set out the early termination charges when customers signed up for their tariffs.
Ofcom’s Director of Investigations and Enforcement Gaucho Rasmussen 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. 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.”
EE said it accepted the fine and recognised that it had made a mistake.
A spokesperson 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.”
It was a different story from Virgin, who said it planned to appeal the decision because it had refunded or made charity donations in the name of nearly all of those 82,000 affected by the higher charges.
Virgin Media CEO Tom Mockridge said: “We profoundly disagree with Ofcom’s ruling. This decision and fine is not justified, proportionate or reasonable.
“As soon as we became aware of the mistake we apologised and took swift action to put it right by paying refunds, with interest, to everyone affected.”
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