23rd Nov 2018
EE and Virgin Media have been fined a total of £13.3 million by Ofcom for overcharging customers.
The hefty fines were handed out to the companies after the UK communications regulator found that customers who had cancelled phone and broadband contracts early had been unfairly billed excess sums.
Ofcom revealed that around 400,000 EE customers had been over-billed to the tune of £4.3 million, while Virgin customers numbering almost 82,000 were overcharged by nearly £2.8 million.
6,800 of those Virgin Media customers were overcharged by more than £100. The firm was also fined an additional £25,000 for “providing incomplete information” to Ofcom.
Ofcom found that Virgin had charged early-exit fees that were higher than what customers had agreed to on their contracts, a practice that the regulator said went on for almost a year. The company has since reimbursed or made charitable donations covering 99.8% of the fees customers were overcharged.
EE faced censure after Ofcom found that the firm did not set out the charges mobile customers would face if they left their contracts early. The regulator said that initially 15 million EE customers faced being overcharged by up to £13.5 million, but the company had waived some of this, leaving £4.3 million in excessive charges.
A spokesperson for EE said: "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."
According to Ofcom however, £1.6 million out of the £4.3 million figure has not been repaid, due to EE not having records covering the whole six-year period.
Although Virgin has agreed to lower its early exit fees by between 30% and 50% (and also waive new contracts for customers who move house but stay with the provider) it has announced its intentions to appeal against its share of the fine, which amounted to £7m, with CEO Tom Mockridge branding the fine “unreasonable” and “excessive”. EE received a smaller fine of £6.3 million, with Ofcom taking the decision to reduce its initial £9 million fine by 30% to “reflect that EE admitted the breaches and agreed to settle the case”.
Ofcom’s Director of Investigations and Enforcement, Gaucho Rasmussen, said: “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.”