Ofcom opens investigation into Virgin Media contract cancellation

As Ofcom publishes cost-of-living action plan update on range of work to support hard-pressed households, UK watchdog to probe operator’s contract termination and complaints handling

UK communications regulator Ofcom has opened an investigation into Virgin Media following complaints from customers that the company is making it difficult for them to cancel services.

Explaining its actions and in particular why it feels a probe is necessary, Ofcom said it was concerned about the number of complaints received from Virgin Media customers who have tried to leave but said the company made it difficult. Some struggled to get through to an agent on the phone; some found their call was dropped mid-way through or they were put on hold for long periods. And many said they had to make lengthy and repeated requests to cancel, as their initial instruction was not actioned.

The regulator highlighted the fact that its rules – known as General Conditions – were clear. That is, the conditions or procedures telecoms providers have in place must not act as a disincentive for customers who wish to cancel their contract. BT has stressed that being able to switch provider easily is an important part of a competitive market and that the ability for customers to shop around, switch and save is particularly important given the current cost-of-living crisis facing UK households.

"As well as probing whether Virgin Media has complied with our contract termination rules, our investigation will also look at whether it has failed to meet our requirements on complaints handling. This will include whether customers were appropriately informed of their right to escalate their complaint to an independent ombudsman," said Ofcom, in a statement.

Specifically, if a customer is unhappy with the outcome of their complaint, or it remains unresolved after eight weeks, the provider must issue a "deadlock" letter so the customer can escalate their complaint to an alternative dispute resolution scheme, who will make a judgment on the case.

As it begins the investigation process, Ofcom said it would gather further information and provide updates. It warned that if it found Virgin Media had breached the rules, it had the power to issue a fine and direct the company to take remedial action or change its procedures, where appropriate.

"Our rules are there to protect people and make sure consumers can take advantage of cheaper deals that are on offer. That’s particularly important at the moment as households look for ways to keep their bills down,” said Ofcom chief executive Melanie Dawes.

"We're taking action today, on behalf of Virgin Media's customers, to investigate whether the company is putting unnecessary barriers in the way of those who want to switch away.”

As the cost-of-living crisis facing UK households sees no signs of stopping, Dawes also wrote to the leaders of the UK’s leading major telecoms providers calling for immediate action on social tariffs,

In her letter to the telcos’ chief executives, Dawes urged providers who have yet to introduce a social tariff to do so as soon as possible and, for those providers that do offer them, to step up their efforts to raise awareness – for example, through social media campaigns. Ofcom is summoning representatives from the providers to update on the progress they are making, and will for the first time publish take-up of social tariffs by provider in its annual pricing trends report, due later this year.

Ofcom’s cost-of-living action plan update also included preliminary research findings into customers’ awareness and understanding of inflation-linked in-contract price rises. Ofcom has committed to publish by December 2023 the findings of its review into inflation-linked price rise terms, alongside further research on customers’ experiences, and seek views on whether it needs to change its rules.

Responding to Ofcom’s announcement, a Virgin Media spokesperson pointed out to Computer Weekly that the company’s complaints relating to ‘difficulties leaving’ in May 2023 were at the lowest level they’ve been this year and that the operator had increased customer care staffing levels by 56% in the second half of 2022. In addition, the company noted that according to the most recent Ofcom data, customer complaints fell across all Virgin Media fixed products in Q4 2022 compared with the previous quarter – broadband, down 22%; pay-TV, down 11%; and landline, down 36% - and that Ofcom’s latest annual comparing customer service report showed that the majority of Virgin Media broadband (81%) and landline (70%) customers were satisfied with their overall service.

“We are committed to providing our customers with excellent service, supporting them with any issues and giving clear options should they wish to leave,” the spokesperson added. “Complaint rates relating to ‘difficulties leaving’ have halved over the past year, showing the progress we’re making, and we will keep working with Ofcom throughout its investigation, while making further improvements in how we handle customer complaints to provide a better overall experience.”

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