November 16, 2018
The amount EE and Virgin overcharged switching customers
Ofcom has ruled that Virgin and EE have been charging customers an excessive amount when they cancelled their contracts early.
Early termination charges are permitted by the regulator as long as fees are made clear to the customer and are not so high as to make switching provider too costly. Ofcom determined that the price was indeed too high for the 400,000 EE customers who were overcharged at an aggregate cost of £4.3 million, and Virgin Media’s 82,000 customers who together were fleeced for £2.8 million.
Frequent mergers and the bundling of services have conspired to reduce competition in telecoms, leading broadband and mobile telephony to be the second and third most concentrated consumer markets in 2017. EE’s history perfectly encapsulates this trajectory—born from the merger of T-Mobile and Orange in 2010 and then snapped up by BT in 2016.
While Ofcom levied a fine of more than £13 million on the two firms, it’s unclear whether the scandal will affect the attitude of a government who’ve hinted at support for further consolidation.