Nick Smith MP for Blaenau Gwent & Rhymney has written to the Chief Executive of Virgin Media following Ofcom’s decision to impose a £28 million financial penalty after finding the company made it unnecessarily difficult for customers to cancel their contracts.
Ofcom said that Virgin Media used tactics including “repeated attempts to pressure customers to stay, even when they had made it clear they wanted to cancel; unnecessary or excessive call transfers to other departments; excessively, unnecessarily and repeatedly keeping customers on hold; deliberately dropping calls; and failing to process cancellations on the system” and “effectively encouraged the use of these behaviours to deter customers from cancelling by financially rewarding them through its commission scheme.”
Mr Smith’s letter follows a question raised by Mr Smith in the House of Commons on Thursday 9 July in which he said: “Virgin Media has been fined a record £28 million for ripping off its customers, yet the chief executive appears to be getting off scot-free. I think that the shareholders should be considering his future and the possibility of bonuses being returned.”
He added: “Constituents will be asking who is accountable for such predatory corporate behaviour?”
In his letter to Chief Executive Lutz Schüler, Mr Smith asks:
- What responsibility he accepts for the culture and governance that allowed these practices to persist.
- What consideration he has personally given to his future in the role following Ofcom’s findings.
- Why a previous Ofcom enforcement action in 2018 failed to prevent similar failings from recurring.
Mr Smith also confirms that he is writing separately to the Chair of Virgin Media O2’s Remuneration Committee to ask what consideration is being given to reviewing bonuses awarded to senior executives during the period the practices were in operation.
In the letter Mr Smith concludes: “The public will rightly question how those responsible for overseeing these practices can continue in post and receive substantial bonuses while consumers were left to deal with the financial and emotional consequences.
“Accountability must extend beyond financial penalties imposed on the company; it must also apply to those responsible for its leadership and culture.”
Dear Mr Schüler,
I write in my capacity as the Member of Parliament for Blaenau Gwent & Rhymney regarding Ofcom’s recent decision to impose a £28 million financial penalty on Virgin Media, a matter I raised in Parliament last week.
I was deeply concerned by Ofcom’s findings that “millions of calls made by customers between 1 January 2022 to 11 September 2024 were likely to have been mishandled by call agents in order to delay or prevent customers from cancelling and switching to a competitor.”
Tactics employed included “repeated attempts to pressure customers to stay, even when they had made it clear they wanted to cancel; unnecessary or excessive call transfers to other departments; excessively, unnecessarily and repeatedly keeping customers on hold; deliberately dropping calls; and failing to process cancellations on the system.”
Perhaps most concerningly, the investigation revealed that Virgin Media “effectively encouraged the use of these behaviours to deter customers from cancelling by financially rewarding them through its commission scheme.”
The consequences for customers were significant. Many would have experienced prolonged frustration, unnecessary expense and considerable distress while attempting to cancel their services. Some customers felt they had no option but to cancel their direct debits to stop further payments, putting their credit ratings at risk.
These findings are deeply troubling.
As Chief Executive Officer, I would be grateful for your responses to the following:
i) Your view on your own accountability for the culture and governance that allowed these practices to persist.
ii) What consideration you have personally given to your future in the role in light of Ofcom’s findings?
I note that Ofcom’s findings explain that Virgin Media was fined by Ofcom in 2018 for breaching the same consumer protection rule.
I would be grateful if you could therefore also explain:
iii) Why this earlier enforcement action did not prevent a recurrence of these failings?
Given the seriousness of these findings and the scale of the consumer harm identified by Ofcom, I will also be writing separately to the Chair of the Remuneration Committee to ask what consideration is being given to reviewing the bonuses awarded to senior executives during the period between 1 January 2022 and 11 September 2024, when these practices were in operation.
The public will rightly question how those responsible for overseeing these practices can continue in post and receive substantial bonuses while consumers were left to deal with the financial and emotional consequences. Accountability must extend beyond financial penalties imposed on the company; it must also apply to those responsible for its leadership and culture.
I look forward to your response.
Kind regards,
Nick Smith MP
Member of Parliament for Blaenau Gwent and Rhymney