knowledge 10 June 2025 |

High Court determines that Virgin Media’s procedures for contract termination act as a disincentive to consumers changing service provider

Following an investigation, the Commission for Communications Regulation (“ComReg”) successfully sought a declaration that Virgin Media had not complied with its obligations under Regulation 25(6)(b) of the Universal Service Regulations (the “Regulations”)¹, which requires an undertaking to “ensure that conditions and procedures for contract termination do not act as a disincentive to a consumer to changing service provider”, and an order that Virgin Media comply with its obligations under the Regulations.

The two issues the subject of the proceedings were (i) the “save activity” engaged in by Virgin Media agents when customers call to cancel and (ii) the imposition of a 30-notice period on customers changing providers.

The Legal Test  

The proceedings were the first ever taken against an undertaking in Ireland for failing to ensure that its conditions and procedures for contract termination do not act as a disincentive to changing service provider and therefore identified for the first time the legal test to be applied:

(i) A “disincentive” is something which operates as an obstacle or impediment to switching. For example, where an agent persists in sales activity in which the customer has no interest;

(ii) A “disincentive” is not limited to something that actually deters switching, but extends to procedures or conditions that make switching less likely;

(iii)The word “procedures”, when read in conjunction with the word “disincentive”, extends to practical obstacles or impediments that a provider may seek to place in the path of a customer to hinder the exercise of their choice to move to a different provider. Such procedures cover any hoops that the customer must jump through in order to change provider;

(iv) The word “procedure”, when used in connection with a service provider, involves some level of systematic operation or course of action on the part of the provider, not an isolated or one-off occurrence;

(v) An objective and reliable method must be used to establish whether a particular condition or procedure acts as a disincentive; and

(vi) If there is no objective evidence of impact on customers’ behaviour, then it becomes more difficult to establish that the condition or procedure does act as a disincentive. However, there is no threshold of materiality; once an objectively measurable impact on customer behaviour is shown, that is enough even if switching was not delayed or prevented in a majority of cases.

The Decision

ComReg was successful on the “save activity” ground, with the Court having considered the call transcripts, the agent training materials and the financial incentives payable to agents who succeed in saving a customer, finding:

(i) Virgin Media’s training materials did not contain an instruction that save activity should cease where it becomes clear that it is not welcomed by the customer or that the customer is intent on cancelling. The training materials also instruct agents to engage in save activity prior to giving effect to a cancellation request;

(ii) The lack of such an instruction has resulted in some Virgin Media agents persisting in save activity in the teeth of a clear and unequivocal expression of an intention to cancel; and

(iii) In the absence of anything to the contrary in its instructions to agents, the availability of financial incentives (which are payable only upon a successful “save”) is bound to encourage some agents to persist in save activity even where the customer has made it clear that they just wish to cancel.

The Court found that it had not been established that a 30-day notice period acts as a disincentive to changing service provider. The Court emphasised that this was not a finding that a 30-day notice requirement is legally valid in the context of switching, but rather that it was not established to be a disincentive on the evidence presented in this case.

Orders

The Court ultimately ordered that Virgin Media comply with its obligations by amending its agent training materials and associated documents (including, where relevant, its materials in relation to financial incentives available to agents) as follows:

(i) to remove all instructions to the effect that agents are required, encouraged or expected to engage in save activity where it is not welcomed by the customer or where it is clear that the customer is intent on cancelling;

(ii) to include the following instructions to agents:

(a) A customer's wish to cancel should be given effect to as soon as the customer makes his or her intention clear. This also applies in circumstances where it is clear that the customer does not welcome save activity.

(b) The above instruction does not preclude an agent asking a customer why the customer wishes to cancel and if the customer identifies a particular issue, the agent is not prohibited from seeking to address that issue so long as the agent does not persist in that activity after it becomes clear that the customer is minded to proceed with cancellation.

(c) Where customers are not prepared to discuss why they propose to leave, the agent should move immediately to cancel.

(iii) to make clear that no financial incentive for successful save activity is payable to its agents where save activity is engaged in contrary to the instructions referred to in ii. above.

The Court also ordered that Virgin Media provide retraining to all of its agents on how to handle cancellation requests appropriately (and to include the matters detailed above) and that all new agents  be provided with such training prior to handling cancellation requests.

Significance of the Judgment

This is a landmark judgment in the regulation of electronic communications in Ireland, which underscores the importance of ensuring that consumers can freely switch service providers. 

This is certainly an area of regulatory focus throughout Europe with Ofcom having followed in the footsteps of ComReg by opening an investigation into Virgin Media in the UK in relation to similar issues. 

Also contributed to by Rory Purcell