Ofcom is looking into Virgin Media's controversial early termination fees.
Telecoms regulator Ofcom has launched an investigation into Virgin Media’s early termination charges following complaints from customers that have faced bills of up to £240 to leave.
Virgin Media charges an early termination fee when customers end their contract early – even when a customer is moving home and Virgin Media broadband is not available at the new address.
The investigation will look into whether Virgin Media’s fees comply with Ofcom’s General Conditions (9.3) – which says providers must ensure contracts don’t disincentivise people from switching, and are fair under Section 62(1) of the Consumer Rights Act 2015.
Virgin Media’s fees
Telecoms providers can charge early termination fees if you leave a contract early, but they are meant to be fair and reasonable.
This means they should reflect the work carried out to terminate an agreement and the loss to the company for ending the contract early.
The cost can vary depending how long you have left on your contract, but there is usually a minimum period you will be charged for.
However, Virgin Media customers have reportedly been charged up to £240 to leave a contract early even though they could not take the service with them to the new address.
Virgin Media’s terms and conditions state: 'An Early Disconnection Fee is also charged when you move to another address during a minimum period, and don't continue with Virgin Media services for any reason.
'This includes if we're unable to provide our services at your new address.'
One of the problems for Virgin Media customers that move home is that Virgin Media broadband isn’t available everywhere, so they have less opportunity to avoid the charges by just keeping the same deal.
Virgin Media has its own fibre network which covers just over half of the UK, so there’s a higher chance that home movers won’t be able to take the service with them to a new address compared to other providers which all use BT’s Openreach network that covers most of the country.
A Virgin Media spokesperson said: 'We note Ofcom's investigation into early termination charges and will work with them during the course of their inquiry.'
What about other providers?
Ofcom says it receives a large number of complaints about early termination charge.
Complaints show customers tend to be unclear about the circumstances in which early termination charges can be applied and question how fair charges are.
So, it has said it will be monitoring the early terminations fees of all communication providers in a separate offering broadband, mobile and/or pay TV services and may choose to investigate other firms further.
How to beat Virgin Media’s fee
If you’re a Virgin Media customer and have been hit with a fee for ending your contract early, you can dispute it by complaining directly to the firm.
Virgin Media then has eight weeks to respond. If it doesn’t respond or you’re not happy with the response you can escalate it further to the Communications and Internet Services Adjudication Scheme.
This is an independent dispute resolution service that can consider your case and if it rules in your favour could order Virgin Media to lower or scrap the fee.
What happens next?
Ofcom has just launched this investigation but if it finds Virgin Media has acted unfairly it could force it to change its terms and conditions and customers that have been hit with the fee may be able to claim money back.
If you’re not happy with your broadband provider take a look at our guide to switching without the hassle.
More on household bills:
How to cut the cost of your sky tv, broadband and phone bills
How to cancel a UK mobile phone contract and switch providers