Ofcom has fined Virgin Media £28 million after finding that the telecoms provider repeatedly made it difficult for customers to cancel their contracts. The regulator concluded that Virgin Media had likely mishandled millions of customer calls.

Between 1 January 2022 and 11 September 2024, Ofcom found that Virgin Media call handlers used tactics that delayed customers who wanted to cancel and switch provider. These included:

· deliberately dropping calls;

· transferring customers excessively or unnecessarily; and

· placing customers on hold without good reason.

The fine comes as Virgin Media faces increasing pressure from competitors offering cheaper deals in a highly competitive market.

Virgin Media has reportedly redesigned parts of its customer service operation in recent years. Since the investigation, Ofcom has said that the company has made several important changes.

Ofcom has also introduced the ‘One Touch Switch’ system, which allows customers to move to a new service by contacting their new provider, without needing to notify their existing provider separately.

The Legal Implications

Ofcom found that Virgin Media breached consumer protection rules by making its cancellation process a disincentive for customers who wished to end their contracts.

In the UK, television and broadband contracts are governed by a combination of consumer law and Ofcom regulations. Providers must give customers clear pre-contract information, including details of:

· the total price;

· the contract length;

· the cancellation process; and

· any price increases.

The Consumer Rights Act 2015 requires providers not to create cancellation processes that are disproportionately difficult or designed to trap customers in contracts. Terms that create a significant imbalance to the customer’s detriment may be unenforceable.

Examples of practices that may raise concerns include:

– hiding cancellation contact details;

– imposing unreasonable barriers to cancellation;

– charging fees that do not reflect actual losses; and

– providing misleading information about cancellation rights.

Berry Smith’s Bottom Line

The Virgin Media decision is a reminder that businesses must ensure their customer journeys are as compliant as their contracts. Whilst clear and transparent terms are essential, businesses should also review how those terms are implemented in practice. A compliant cancellation clause will offer little protection if customers are met with unnecessary delays, excessive transfers or other obstacles when trying to exercise their contractual rights.

Businesses that contract with consumers should regularly review:

· their terms and conditions to ensure cancellation rights are clearly explained;

· customer service procedures to confirm customers can exercise those rights without unnecessary barriers;

· staff training to ensure employees understand and follow compliant cancellation processes; and

· internal practices to ensure they comply with consumer protection legislation and any applicable sector-specific regulations.

Taking a proactive approach to reviewing contracts and operational processes can help businesses reduce the risk of:

· customer complaints;

· regulatory investigations and financial penalties;

· reputational damage; and

· loss of customer trust.

At Berry Smith, our Commercial team regularly advises businesses on drafting, negotiating, interpreting and enforcing a wide range of commercial contracts. If you would like advice on anything including cancellation or termination provisions in your contracts, our team would be happy to help. Contact us: commercial@berrysmith.com