Which? requires Ofcom investigation into Virgin Media over ‘egregious’ pricing
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hich? has requested Ofcom to urgently examine Virgin Media after claiming the agency is probably breaking the legislation by “giving itself sweeping powers to hike customer broadband bills by unlimited sums whenever it chooses”.
The watchdog mentioned it believed Virgin Media was trying to “have its cake and eat it” by making use of inflation-linked annual mid-contract value will increase in its phrases and situations whereas eradicating the proper for affected prospects to cancel with out paying substantial exit charges, and likewise sustaining the proper to hike payments additional at any time.
Which? has formally raised its considerations with the regulator, claiming they’re the “most egregious example of unacceptable price hiking practices across the broadband industry”.
Virgin Media mentioned it rejected the “baseless” allegations within the “strongest possible terms”, claiming that Which? had “wilfully misrepresented” a separate clause in its phrases and situations, which had been written “almost identically” to these of different suppliers.
Which? mentioned its motion was a “shot across the bows” of all UK telecoms suppliers and urged it might have far-reaching implications for companies making ready to probably inflict inflation-busting mid-contract value will increase on thousands and thousands of shoppers once more in April subsequent yr.
This yr, many broadband prospects throughout main suppliers confronted the selection of hefty will increase to their month-to-month payments or paying vital charges to get out of their contract.
Virgin Media, which has virtually six million broadband prospects within the UK, elevated its payments for current prospects by a mean of 13.8% – equal to greater than £100 a yr for some households paying for dearer packages.
Which?’s criticism to Ofcom highlights a clause in Virgin Media’s phrases and situations, which states the agency can “change our charges at any time”.
It has additionally added a brand new clause stating that, in future, prospects will face annual value rises primarily based on Retail Price Index (RPI) inflation plus an extra 3.9% – the identical charge imposed on Virgin Mobile and O2 Mobile prospects, who this yr confronted 17.3% hikes.
Which? mentioned it believed each clauses amounted to unfair contract phrases and could possibly be in breach of the Consumer Rights Act by creating “a significant imbalance” between the rights Virgin Media has granted itself and people of the shopper.
Guidance on unfair contract phrases from the Competition and Markets Authority (CMA) states that “any purely discretionary right to set or vary a price after the consumer has become bound to pay is obviously objectionable”.
Virgin Media is making an attempt to have its cake and eat it by imposing eye-watering inflationary value will increase whereas additionally giving itself the facility to hike prospects’ payments each time it chooses
Which? mentioned the phrases additionally made it unattainable for shoppers to foretell how a lot they are going to find yourself paying for broadband companies after they signal a contract with Virgin Media, which it believed probably amounted to a breach of the Consumer Protection from Unfair Trading Regulations, which prohibit unfair industrial practices, together with deceptive actions and deceptive omissions.
The watchdog mentioned Virgin Media’s pricing practices had been compounded by “woeful” customer support, with Ofcom already investigating claims the corporate has made it troublesome for purchasers to cancel their companies.
Which? has additionally urged the regulator to evaluate all related telecoms suppliers for compliance with shopper safety laws.
Ofcom is already reviewing inflation-linked, mid-contract value rises amid considerations that they don’t give shoppers adequate certainty and readability about what they’ll anticipate to pay.
Rocio Concha, Which? director of coverage and advocacy, mentioned: “Virgin Media is trying to have its cake and eat it by imposing eye-watering inflationary price increases while also giving itself the power to hike customers’ bills whenever it chooses. Which? believes this is not only unacceptable but potentially unlawful and Ofcom must investigate urgently.
“This should send a clear message to all telecoms firms that time is up for these unjustifiable inflation-linked, mid-contract price hikes. Providers should make a commitment now that they will not try to impose these increases next year, to reassure customers already struggling in a cost-of-living crisis that they will not face yet another unpredictable hit to their finances.”
A Virgin Media spokesman mentioned: “We refute these baseless allegations in the strongest possible terms, which amount to a one-sided, selective and misinformed reading of widely used contractual terms.
“We have always been open and transparent about any price increases. While we know that price changes are never welcome, against a backdrop of rising costs, increased usage and continued investment, we have already openly set out to customers that we are introducing inflation-linked price changes from April next year, which are widely used and give customers greater certainty about what to expect from their bills. Customers were given the right to cancel their contract within 30 days of receiving this notification.
“It’s very worrying that Which? is choosing to wilfully misrepresent our pricing practices. Our terms and conditions are very clear that inflation-linked price rises only apply to a customer’s monthly subscription charges and we have no plans to increase monthly bills multiple times within the same year.
“If separate out-of-bundle charges are increased at any point, then this would be clearly outlined and customers would receive a right to cancel.
“Our terms and conditions have been drafted in line with standard industry practice, consumer law and Ofcom guidelines, and we are extremely disappointed that Which? has decided to make misrepresented claims relating to a single provider, especially one that has made more effort than many to be transparent with its customers.”
An Ofcom spokesman mentioned: “We will consider – and respond to – the issues that Which? has raised.
“We already have an enforcement programme open into whether telecoms firms have previously been complying with our rules, which state that mid-contract price rises must be set out clearly before customers sign up.
“We are also reviewing whether inflation-linked, mid-contract price rises give customers sufficient certainty and clarity about what they can expect to pay. We will report on both of these later this year.”