Ofcom has launched an investigation into Virgin Media's exit fees of up to £240 following complaints from its customers.
The telecoms regulator has begun the probe into whether Virgin Media's early termination fees – which are charged even if a customer moves to an area where they can't get the service – comply with the Consumer Rights Act.
It's also opened a separate investigation into exit fees imposed on consumers by other providers relating to landlines, mobiles, broadband and paid-for TV services.
What's the issue with Virgin Media?
Virgin Media charges customers up to £240 when they exit their contract early, even if they're forced to because they're moving home to an area where Virgin Media's phone, broadband and TV services aren't available. It's the only major provider to penalise customers for this reason.
Its 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."
Virgin Media's exit fee varies depending on how long you've left on your contract and what services you have.
The regulator's investigating whether these fees, for phone, broadband and TV services, comply with the Consumer Rights Act 2015, which aims to protect consumers from unfair contract terms.
Ofcom will look at whether the exit fees are excessive, and so would be deemed an unfair term under the act and deter customers from switching providers.
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."
They urged all customers to check contract lengths before entering into them and said that Virgin Media is expanding its network so more people will be able to take its services when moving.
Virgin Media has its own fibre network in which it has invested heavily and only homes connected to this can use its services. Other major providers use BT's Openreach network.
What are the Ofcom rules?
Ofcom says exit fees should be "fair and reasonable" and take into account the work providers have carried out and the actual loss to them of the contract ending early.
If Ofcom finds that Virgin Media has acted unfairly it could force the company to change its T&Cs, and former customers could be able to claim back exit fees.
Ofcom will check other providers' T&Cs
As part of a separate investigation, Ofcom will look at other providers' T&Cs to see if their exit fees are fair, and clearly stated when customers sign up. It will also look at past complaints.
Ofcom said it receives many complaints about exit fees from consumers, which shows they're confused about when an exit fee can be charged.
Following the investigation, the regulator will decide if it needs to take further action, which could include changes to T&Cs or possible fines.
I'm unhappy with my exit fees – how do I complain?
- Initially you'll need to complain directly to your provider. You can do this via free online complaints tool Resolver.
- If you're unhappy with the response, or haven't had one after eight weeks, you can escalate to the free Ombudsman Services (or the Communications and Internet Services Adjudication Scheme if you're complaining about Virgin Media).
Ofcom doesn't deal with individual complaints, but if you're still unhappy with the response after you've escalated your claim, you can submit it to Ofcom, to be used when it's deciding what to investigate.