Virgin Media and EE have been fined a combined £13.3 million for overcharging nearly 500,000 phone and broadband customers.
Ofcom said both companies failed to make clear the charges customers would have to pay if they ended their contract ahead of schedule.
The watchdog’s investigation found about 400,000 EE customers with recurring monthly discounts were over-billed, which saw them overpaying up to £4.3 million.
It added that almost 82,000 Virgin Media customers were overcharged a total of just under £2.8 million.
Virgin Media and EE have been fined a total of £13.3million by Ofcom for overcharging nearly 500,000 broadband customers. Pictured is a Virgin Media advert featuring billionaire founder Sir Richard Branson and Olympic sprinter Usain Bolt
Ofcom fined EE £6.3million and Virgin Media £7million for breaking consumer protection rules.
Gaucho Rasmussen, Ofcom’s Director of Investigations and Enforcement, said: ‘EE and Virgin Media broke our rules by overcharging people who ended their contracts early.
‘Those people were left out of pocket, and the charges amounted to millions of pounds.
‘That is unacceptable. These fines send a clear message to all phone and broadband firms that they must play by the rules, in the interests of their customers.’
Meanwhile Virgin Media has vowed to appeal against Ofcom’s decision.
Tom Mockridge, chief executive of Virgin Media, said: ‘We profoundly disagree with Ofcom’s ruling. This decision and fine is not justified, proportionate or reasonable.
‘A small percentage of customers were charged an incorrect amount when they ended one or more of their services early and for that we are very sorry.
‘As soon as we became aware of the mistake we apologised and took swift action to put it right by paying refunds, with interest, to everyone affected.
Around 400,000 customers were affected at EE, while another 82,000 were overcharged by Virgin Media
‘For those few people we could not locate, we have made an equivalent donation to charity.’
A spokesman for EE added: ‘We accept Ofcom’s findings and recognise that we have made a mistake. We apologise to customers with discounted tariffs who paid more than they should have when cancelling their contracts early.
‘We’ve already refunded customers and changed the way we calculate early termination charges, and we will continue to focus on ensuring our policies are clear and fair for all customers.’
Ofcom’s investigation found EE did not clearly set out the exit fees that would be charged to customers on its discount contracts over a six-year period.
It discovered that up to 15million discount contracts for EE’s mobile, landline and broadband customers required them to pay excessive early exit charges, of which 400,000 decided to leave and were over-billed.
Virgin Media overcharged customers leaving contracts early for almost a year, according to Ofcom.