Telecommunications provider Virgin Media has been issued with a record penalty of £28 million by industry regulator Ofcom.
The sanction follows an investigation by the communications regulator which uncovered a ‘widespread’ and ‘often deliberate’ series of handling errors when customers attempted to terminate their contracts between January 2022 and September 2024.
Customers of Virgin Media experienced extended waiting periods, multiple call rerouting, interrupted connections and requests to end services that were not processed.
The company also attempted to discourage customers from departing and failed to provide full cooperation during Ofcom’s inquiry, constituting a second breach following a comparable financial penalty in 2018.
Natalie Black, Ofcom’s group director for infrastructure and connectivity, stated that the evidence was unambiguous. She noted that Virgin Media created obstacles for customers seeking to exit their agreements and subsequently failed to cooperate fully with the investigation. She added that this resulted in the largest fine the regulator has ever imposed under its consumer protection regulations for direct harm to individuals.
Ofcom indicated that the financial penalty should act as a deterrent to other telecommunications providers.
Ms Black commented that the regulator was delivering an unambiguous message that any company deliberately acting against its customers’ interests would face substantial consequences.
Ofcom reported initiating its investigation after receiving almost 2,000 telephone complaints from Virgin Media’s broadband, fixed line and television subscribers describing difficulties ending their contracts.
The regulator discovered that Virgin Media, which combined with mobile operator O2 in 2021 to create Virgin Media O2, organised its retention department into two ‘levels’ of representatives, with exclusively those on the second level authorised to handle cancellation requests. This arrangement required customers to restate their requirements to at least one additional representative.
Some dissatisfied customers ultimately cancelled their direct payment arrangements, which subsequently affected their credit ratings.
Ofcom reported that Virgin Media motivated employees to deter customers from cancelling through incentives within its commission programme.
The financial penalty, which must be remitted within the forthcoming two months, will be forwarded to the Treasury.
All impacted customers must additionally have received appropriate compensation or resolution within six months.
Virgin Media has since restructured its customer support operations, encompassing modifications to its commission structure, staff development, quality assurance and oversight procedures.
A Virgin Media representative stated that the company is dedicated to providing all customers with excellent service and expressed regret to the minority who encountered difficulties when getting in contact to negotiate a new arrangement or terminate their contract in the past. They explained that the company has entirely rebuilt its customer services in recent years, addressing the previous shortcomings identified by Ofcom through numerous enhancements, and has resolved all official customer complaints from that period, offering appropriate remedies where necessary. They noted that the customer service improvement initiative, supported by considerable investment, has been transformative. According to Ofcom’s most recent figures, Virgin Media now has the lowest complaint levels among broadband providers, with grievances at historically low levels, and complaints specifically concerning ‘difficulties departing’ were 89 per cent lower the previous year compared to 2023. They stated that with One Touch Switch now operational across the sector and numerous competitive packages and services on offer, customers have more options than ever to select the most suitable arrangement for their requirements.