Ofcom Launch Investigation into Virgin Media Business Practices

Following a wave of customer complaints, Ofcom has launched an investigation on Virgin Media. The complaints detail customers unable to leave their contracts,  a violation of Ofcom’s General conditions. The investigation will more directly look at the operator’s compliance with contract termination and complaints handling rules.

The investigation currently sits at the information gathering stage, but Ofcom promise active updates as the investigation goes forward, noting that it will take action if Virgin Media is found to be in breach of the rules, most likely issuing a fine and ordering the company to take remedial action.

Ofcom point out their concerns over the number of complaints received from Virgin Media customers. These complaints often detailed how it was difficult to switch provider, with problems causing this being a variety. Some said that they couldn’t even get through on the phone to the operator, with others complaining about dropped calls and failure on following up with customer issues. As part of the investigation, Ofcom have promised to look into meeting requirements on complaints handling.

Ofcom point out in their report that Virgin Media previously scored below average on call waiting times and and satisfaction with customer handling. In retaliation to this, Virgin had been keen to mention how its scores had still improved from the year previous, showcasing their improvement.

A representative speaking on the subject had this to say: ”Complaint rates relating to ‘difficulties leaving’ have halved over the past year, showing the progress we’re making, and we will keep working with Ofcom throughout its investigation, while making further improvements in how we handle customer complaints to provide a better overall experience.”

While that may be the case moving forward, the issues have already happened and the damage has been dealt. The allegation alone that Virgin Media make it difficult for their customers to switch or leave is a ”very bad look for the UK’s third-biggest broadband provider, particularly in the midst of a bitter cost-of-living crisis,” said Alex Tofts, broadband expert at price comparison service Broadband Genie.

”If Ofcom’s investigation finds the company in breach of its rules the damage to its reputation is likely to far outweigh any fine,” he said. Toft makes a note that Virgin is at a far greater risk of losing customers wanting to cut their bills than its rivals due to its focus on fibre and the related high costs. He also points out how many customers may not want to call Virgin Media due to its reputation, but with no live chat or even phone number in the help sections on their website, it’s hard to navigate and instead brings customers to the same phone number each time.  While Tofts comment isn’t likely to do all too much to the company, the outcome of the investigation into directly these things likely will.

In terms of the cost of living crisis, which will impact almost all telecoms operators around the country, Ofcom has been leaning towards telcos providing and promoting social tariffs. In April, it was disclosed that just 5.1% of those eligible for social tariffs- more affordable internet plans for those who may struggle to afford general ones- had even signed up for them. That’s an estimated 220,000 households out of the 4.3 million eligible. As it stands, Ofcom have been trying to encourage operators to do the the right thing, with its latest campaign for this being to send a somewhat urging letter to multiple telco CEOs.

Social tariffs or not, making it easier for customers to switch to cheaper plans is a key tenet in the way Ofcom are handling the cost of living crisis, and is one that Ofcom was happy to reiterate in its announcement on the current Virgin Media situation. Forcing customers to stay on your plan is a very unusual approach to customer retention, and definitely a dangerous one to put in practice with Ofcom around.