Ofcom has imposed a record £28million penalty on Virgin Media after finding the telecommunications company repeatedly made it harder for customers to cancel their contracts.
The regulator said millions of customer calls were likely mishandled over a period of almost three years, with subscribers prevented or delayed from switching to providers offering better deals.
The investigation marks Ofcom’s largest ever fine under its consumer protection rules for direct harm caused to consumers.
It found Virgin Media staff deliberately terminated calls from customers attempting to cancel their services.
Virgin Media fined record £28million by Ofcom for blocking customers from cancelling contracts
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Subscribers were also placed on hold without a legitimate reason, according to the investigation.
Ofcom found callers were subjected to excessive and unnecessary transfers between departments, creating further obstacles for customers trying to end their contracts.
The regulator said these practices collectively prevented or delayed customers from exercising their right to switch providers.
Customers seeking to leave for competitors offering better packages were unable to complete the cancellation process because of the barriers they encountered.
Ofcom also found Virgin Media’s internal commission structure encouraged staff to prevent customers from cancelling their contracts.
The regulator said call centre agents were financially rewarded for retaining customers, with the commission scheme incentivising behaviour that obstructed people attempting to leave.
According to the investigation, the payment structure gave staff a direct financial incentive to drop calls, place customers on unnecessary holds and transfer them repeatedly between departments.
Ofcom said the commission arrangements created an environment in which preventing cancellations could increase individual agents’ earnings.
It’s the largest fine of its kind that Ofcom has ever issued
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PANatalie Black, Ofcom’s group director for infrastructure and connectivity, said: “The facts are clear. Virgin Media made it harder for customers to cancel their contracts and then did not fully cooperate with our investigation.”
She added: “As a result, we are levelling our largest ever fine under our consumer protection rules for direct harm to consumers.”
The final penalty was reduced by 30 per cent after Virgin Media admitted its failings and agreed to settle the investigation with the regulator.
Despite the reduction, the £28million fine remains the largest Ofcom has ever imposed under its consumer protection rules for direct harm to consumers.