Broadband and phone providers fined for overcharging customers

According to industry regulator Ofcom, nearly half a million EE and Virgin customers’ in the UK are “out of pocket” due to a billing error, resulting in large fines for the companies. The fines, which were given for overcharging customers who ended their phone and internet contracts early, are an estimated £13.3 million.

The regular estimated that around 400,000 EE customers and 82,000 Virgin customers were overcharged by £4.3 million and £2.8 million retrospectively.

In a statement, Digital Minister Margot James said phone and broadband providers need “to play by the rules”. And Gaucho Rasmussen, director of investigations and enforcement at Ofcom, commented: “EE and Virgin Media broke our rules by overcharging people who ended their contracts early. Those people were left out pocket and the charges amounted to millions of pounds.”

However, Virgin Media said that it would appeal the decision. The company said it “strongly disagrees” with Ofcom’s decision and will be appealing to the Competition Appeal Tribunal. This follows a fine of £7 million for the overcharges, plus an addition £25,000 fine for failing to provide complete information to the regulator.

“This decision and fine is not justified, proportionate or reasonable. A small percentage of customers were charged an incorrect amount when they ended one or more of their services early and for that we are very sorry,” said Tom Mockridge, chief executive of Virgin Media.

The regulator found that Virgin Media had charged customers higher amounts that agreed in their contract, which continued for nearly a year. This resulted in overcharges of 1.5% for 5.5 million customers between 2016 and 2017.

Additionally, 15 million EE customers were overcharged by a total of £13.5 million in incorrect early-exit fees. EE apologised, and a spokesperson 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.”

Gillian Guy, chief executive of Citizens Advice, said: “Anyone who has been affected by this deserves a refund.This is another in a long line of failings in the mobile and broadband industry – we need an independent consumer champion to stick up for customers and stop this from happening.”