Investigation into Virgin Media's compliance with contract termination and complaints handling rules

Following our investigation, Ofcom has today issued a Confirmation Decision to Virgin Media Limited (trading as ‘Virgin Media’) under section 96C of the Communications Act 2003 for contravening General Condition C1.8 between 1 January 2022 – 11 September 2024 (the Relevant Period). 

We opened our investigation following significant numbers of complaints from Virgin Media customers about difficulties cancelling in calls with agents. As a result of our investigation, we have found that during the Relevant Period Virgin Media had in place procedures for contract termination which likely acted as a disincentive to switch for customers on millions of calls by delaying or preventing them from taking advantage of a competitor’s offer. Specifically:

1. Under Virgin Media’s procedures, callers who wanted to cancel were put through to its retention team, which it split into two ‘tiers’ of agents. Only agents in the second tier were able to process cancellations. This meant that callers who were initially put through to an agent in the first tier would then need to repeat their request to cancel in another similar conversation with an agent in the second tier, in order to stand a chance of having their cancellation processed.
2. Virgin Media’s internal processes or procedures involved or resulted in agents engaging in the following behaviours:
   a.    repeated attempts to try to retain customers including by offering deals and discounts, when they had made it clear they wanted to cancel.
   b.    unnecessary and/or excessive transfers to agents in departments outside of the retention team.
   c.    excessive and/or repeated use of hold (in each case, where it was not necessary and/or used to delay or avoid a disconnection).
   d.    deliberately dropping calls.
   e.    failures to put through cancellations on the system.

We found that Virgin Media’s procedures allowed and encouraged these agent behaviours by having:

• a commission scheme which effectively encouraged and financially rewarded agents for preventing customers from switching by using the above behaviours, only reducing payouts in limited circumstances;
• training and guidance which failed to prevent the above behaviours, including by not setting clear behavioural expectations or instructing against the use of these behaviours in mandatory training; 
• quality assurance and monitoring processes which were highly selective and narrow in their approach such that the above behaviours were often overlooked. Even where these behaviours were identified, follow-up action was often very limited; and
• insufficient control, visibility and/or oversight over the third-party partners it used to operate its call centre and quality assurance monitoring functions. 

We consider this to be a serious breach of our rules, resulting in customers suffering harm as a result of being disincentivised from switching. This harm took a number of forms, including financial loss, inconvenience, frustration, and increased stress and/or anxiety. Taking account of all relevant factors, we are imposing a financial penalty of £28 million on Virgin Media. This penalty was set having regard to our Penalty Guidelines and includes a 30% discount as a result of Virgin Media’s admission of liability and its completion of Ofcom’s settlement process. In setting this penalty, we took into account a number of factors including:

• the significant consumer harm experienced by customers for nearly three years and the associated financial gain Virgin Media is likely to have made;
• the steps and decisions Virgin Media took in implementing its procedures, and its repeated failures to appropriately identify and prevent the resulting consumer harm until the end of the Relevant Period;
• the fact that Ofcom fined Virgin Media previously for a breach of the same rule in 2018; and
• Virgin Media’s repeated failings with respect to information gathering during the investigation.

Virgin Media made a number of changes, both during and after the Relevant Period, including to improve its commission scheme, training and quality assurance and monitoring.

In addition, Ofcom introduced new rules covering the process for residential customers to switch their broadband and/or landline services. This new process, One Touch Switch (OTS), means that a customer’s new provider must organise the switch, removing the need for customers to speak with their current provider to cancel their contract before switching. Industry launched OTS on 12 September 2024. Our investigation considers the Relevant Period, before the launch of OTS.

This investigation initially also covered our rules relating to complaints handling/ADR (General Condition C4). To make effective use of resources, we engaged separately with VMO2, in relation to both Virgin Media and O2, and through this engagement secured a number of improvements, including to ensure appropriate recording of and closure of complaints, and ensure vulnerable customers who make complaints are treated fairly. 

A non-confidential version of the Confirmation Decision will be published in due course.