Questions of Cash: Virgin Media kept charging us after we'd cancelled our contract

Q. In February last year our TV and broadband provider, Virgin Media, offered us a revised contract, which included a £5 a month loyalty discount, bringing our monthly payments down to £18.65.

But in August it raised the monthly cost by £2.50. We complained, but Virgin was unwilling to offer us any reduction. We therefore switched to TalkTalk, which promised to undertake the switching on our behalf. But Virgin Media continued to take payments out of our account. In January my wife wrote to Virgin Media telling them that we had instructed the bank not to make further payments to them and requested a refund of £63.45. She had no reply. Instead she received a demand on 28 February 2014 for a further £83.45 for the period 11 March to 10 April. Virgin finally wrote on 11 March 2014 acknowledging the cancellation of the contract "as from 5 April".

My wife wrote again on 18 March pointing out that she had not had responses to her earlier letters. Virgin Media neither accepted nor disputed her contention that cancellation notice had been given in September last year. The only response has been a threatening letter from Virgin Media saying that they were now owed £109.60 for the period to 10 May 2014, to be paid within 14 days, failing which Virgin threatened to send our details to a debt-recovery service and warning that our credit rating would be affected.

My wife wrote again to say that £109.60 had been paid under duress and we would continue to seek redress. Virgin Media subsequently advised that they had overcharged by £30.38 and this would be refunded. I have also complained to TalkTalk, which has apologised and suggested we write to Virgin Media to request that it disconnect our line and stop charging us. MR, London.

A. Virgin Media puts the blame for your problems on TalkTalk, which, it says, should not have said that it could cancel your contracts on your behalf. Its spokeswoman, Ashley Scott, says: "TalkTalk should never have incorrectly advised they would be able to cancel Virgin Media cable services on [the reader's] behalf, as this request has to come directly from the customer." She adds: "It's clear TalkTalk did not follow the correct procedure, which has unfortunately resulted in the customer being charged for two separate services."

Virgin Media received the request from your wife for disconnection on 11 March and carried this out on 5 April. TalkTalk says its representative was confused because two services were being transferred, with your phone line being transferred from its electricity provider at the same time as the broadband connection was to move from Virgin Media. A spokesman for TalkTalk says: "We are sorry we did not switch over [the reader's] broadband at the same time as we switched over his home-phone account. This was a mistake and we have apologised and repaid all charges. We are determined to provide a good service along with great value, and to learn from instances like this where we could have served our customers better."

Would it be a good idea to transfer my savings to a credit union?

Q. My bank keeps cutting the interest rate payable on my cash ISA. I now receive such a small rate of interest that I am wondering about transferring the money into my local credit union. They seem to be fairer local organisations that protect people from usurers. My cash savings are usually between £1,000-£2,000 and I was wondering about putting money into my local credit union in Lewisham. Do you think that is a good idea? TK, London.

A. Some credit unions have hit trouble, but as with banks and building societies, deposits held by credit unions are 100 per cent protected up to the value of £85,000. The balance sheet of the Lewisham Plus Credit Union is strong. It holds more than £4m of members' funds. In the year ending last September, it recorded a profit of over £57,000, of which in excess of £27,000 was returned to members as dividends. As you say, credit unions do not seek to maximise profits, but instead focus on providing low-cost loans to borrowers, while providing a fair return to savers. Lewisham Plus's minimum interest rate on loans is 0.75 per cent a month, which equates to an annual rate of 9.4 per cent.

The ombudsman's service has backed Npower's demand for £5,000

Q. I have received a bill for £5,000 from Npower. I believe there must be a mistake in the meter readings. Npower insists that our meter is in good working order and that we must pay the bill. We have taken the case to the Ombudsman's Service, which backed Npower and said that we must pay the bill. The Ombudsman agrees that NPower's customer service has been appalling, so has recommended a £250 goodwill gesture, which they believe is very high. I have spent hours dealing with this since September 2012 and feel this does not reflect the suffering I have endured because of their non-existent customer service. I have little choice but to accept the Ombudsman's terms. MC, Surrey.

A. Npower insists that its charges are correct and that you must pay them. A spokesman for Npower says: "In 2010 [the reader's] energy usage increased to 85 units per day without explanation. In 2011 this decreased to around 25 units per day and has been consistent since, which is what we expect for the size of the property. We visited the property and carried out a meter accuracy test which confirmed that the meter is running correctly and so is not faulty.

We offered [the reader a] £100 goodwill gesture for the level of service she has received, but she declined this. [The reader] stopped paying her direct debit for her energy usage in October 2012 and therefore her outstanding balance has increased. She reinstated her direct debit in January this year, which is currently £534-£317 to cover her ongoing usage and £217 for her outstanding balance. She has also been offered £506.85 as a late-billing credit." Npower's position has been upheld by the Ombudsman.

Questions of cash cannot give individual advice. But we'll do our best to help if you have a financial dilemma. Email us at: questionsofcash@independent.co.uk