Virgin immediately said it would appeal against Ofcom’s decision in the Competition Appeal Tribunal.
“We profoundly disagree with Ofcom’s ruling. This decision and fine is not justified, proportionate or reasonable,” said Tom Mockridge, CEO, Virgin Media. “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.”
Early Termination Charges (ETCs) are widely used by businesses across a number of sectors to calculate the payment due should a customer decide to leave before the end of their agreed contractual term.
In this instance, Virgin Media mistakenly overcharged 85,000 of its 5.5 million cable customers at an average of £34.
The operator admits this should not have happened and has taken a number of steps to prevent it from happening again. Those affected have been refunded with interest.
EE customers who ended their contracts earlier than scheduled were also billed in excess, leading to overpayments totalling £4.3 million.
“We accept Ofcom’s findings and recognise that we have made a mistake,” EE said in a statement. “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.”
The use of ETCs is common across a number of industries.