MSE News: Ofcom investigates Virgin Media over exit fees

Heng_Leng wrote: »

I was told that VM aren't interested in cabling new properties/streets.

They weren't (again probably due to big cost issues) but in the last couple of years they most certainly are now. They even have a dedicated team for it called Project Lightning. The street I moved to last year (not a recent build) had just been cabled before I moved in and they offered a fantastic deal. However, their atrocious CS was enough to make me cancel between order and installation.

Heng_Leng wrote: »

The cable networks were actually built by providers that went bust and were taken over. VM didn't spend billions setting up the network, they inherited it.

VM is really just the licensed name though isn't it. In practice it is NTL/TW and Virgin Mobile. NTL for sure spent heavily on expansion and acquisitions. As far as I'm aware, when the merger happened NTL's debt wasn't just written off.

sultanabran wrote: »

At least Virgin charge you an early termination.

I moved home and still had a couple of months of my Sky TV contract remaining. I offered to pay the remaining balance of my contract in a lump sum for them to terminate my contract early, they wouldn't be losing out, they said they couldn't.

So I've got to keep a direct debit running for a service I can no longer use, that I was willing to pay to get out of.

If I were you, I'd call them back and refer them to their own website which states you can actually cancel and pay an ETC when you are within your minimum term.

https://www.sky.com/help/articles/remove-a-package-or-cancel-your-subscription

Have a look at the fees table, and see if it would be cheaper to insist they cancel or just carry on paying monthly as you are now.

HornetSaver wrote: »

And the one, indeed only, good reason it's not paid up front is that the companies are trying to compete with one another and are terrified of breaking ranks.

Up front fees would make the market a better place by not making it so easy to enter for people who are woefully unprepared for the ongoing financial committment. However, that's not the case, and it's the companies who are to blame. As has been said above, transparent charges are preferable to semi-suprise penalties (penalties that should have been understood at the point of agreement, but for whatever reason, including in some cases that the customer was not a librarian, weren't).

I don't think you can lay that entirely at the providers door. There are plenty of people who cant or won't pay upfront fees and for whom costs spread out equally over the contract period are just what they want. And over the contract period, upfront fees and lower monthly charges, or no upfront fees and higher monthly charges, the total cost is the same anyway. The real issue I think is that the public won't read the small print until the small print comes into effect, so maybe th answer is for providers to be more clear in highlighting the costs for early termination and in Virgins case, they should highlight that the service is not necessarily portable to a new address.

HornetSaver wrote: »

And the one, indeed only, good reason it's not paid up front is that the companies are trying to compete with one another and are terrified of breaking ranks.

Up front fees would make the market a better place by not making it so easy to enter for people who are woefully unprepared for the ongoing financial committment. However, that's not the case, and it's the companies who are to blame. As has been said above, transparent charges are preferable to semi-suprise penalties (penalties that should have been understood at the point of agreement, but for whatever reason, including in some cases that the customer was not a librarian, weren't).

I suspect the providers might actually prefer to charge high upfront fees because it would make people much less likely to switch as most customers would balk at £200 up front plus £10 per month but happily remain on £30 per month.....

Edit: As is amply demonstrated by the market for mobile phones where it is much cheaper to buy an iPhone sim free and a contract separately but how many happily pay £40 per month for 24 months (£960 over two year) rather than £600 up front and £10 per month.... (total £840)

iniltous wrote: »

Tend to agree with this, and although may seem harsh, signing up to a minimum term , then before the end of that term, moving to another address, is not the service provider changing the terms of the contract, but the consumer.

If Ofcom decide that ETC's are not good for the consumer and insist they are removed, no doubt the 'law of unintended consequences', will kick in, like when they decided BT offering 2 directory enquired searches for £0.40p was anti consumer , so introduced 118 numbers, that went well didn't it ?
Providers will just move the costs to the front end instead of spreading the installation and equipment charges over the period of the minimum term, so get ready for £100+ installation charges , even when there is service already at the property, £75+'equipment rental' charges' and disconnection charges of £30+ when there are nothing but 30 day notice periods to quit,but don't expect the couple of hundred extra ££'s that you effectively pay now over the 12/18/24 months as part of the monthly fee to be given up by the provider either, the larger than it needs to be cost, to cover the currently free install/equipment charge ,will stay the same, it's just the punter will pay twice, once up front and also via larger than they need to be monthly charges.

Difficult one this, as its a highly complex area and topic. Just one thing though, iniltous -
"If Ofcom decide that ETC's are not good for the consumer and insist they are removed, no doubt the 'law of unintended consequences' will kick in."
OFCOM are actually looking at UNFAIR ETCs only and not scrapping them completely, and if a company needs to amend them.
In my opinion Virgin Media (Liberty Global) are going to lose this one and will be forced to change their T&Cs as they are unfair (I'll go into why in a minute).
But facts first - all these companies we have to deal with are businesses, and are only in it to make a profit.
The way contracts are loaded today (12/18 mths) is that they make no profit in the early term of ones contract but do at the back, which is usually the last 3 to 6 months. So early termination can effect their profits badly. Hence ETCs (early termination charges).

There are 2 providers at high risk of having their ETC T&Cs changed and these are Virgin Media and Sky (UK) PLC, but for far different reasons...

Virgin Media's cable network only covers 44% of the UK, or 15m homes of the 26 available. So if a user moves home, and then requests Virgin to switch to it, but they don't cover it, thats not the users fault. It is ultimately Virgin's, but that'll be £200 pounds please. Going forward, I think not and they will lose, as its an unfair condition.

Sky - Sky build into their T&Cs that they may (and often do) push up their prices by up to 9.9% without giving the user the right to cancel. Why?
Why should Sky be allowed to push up their prices without giving a user the right to cancel when all the rest do? And under OFCOM edict have to. So they will lose that one as well, in my opinion.
But as iniltous points out above, this could going forward have unintended consequences for the way contracts are loaded in the future.
Sorry for the long post, but its a very complex subject. Heck, I haven't even covered half of it.