Thought I'd follow up. After lots of communication ... and escalating via formal channels (I forget the acronym, but it was one of the isp watchdogs - not ofcom) ... I am happy to say that Virgin resolved the issue, with a fair refund.

Hi Recently switched my phone & broadband bundle from Virgin Media to O2. I contacted O2 who managed the transfer. Since I have done this with 3 other providers over the years I assumed this would work the same way and that O2 would cancel both phone AND broadband!! After two bills and the joy of customer service ... I have discovered that the transfer is not actually a transfer in the case of VM broadband. Because VM is on their own fibre network, the broadband with the new provider is a new connection AND DOES NOT replace the VM broadband. So, it stayed active ... even though I was now on O2 broadband. I explained this to Virgin, and questioned that they were charging me for two months of non-existent usage, but was told it was my fault for not cancelling broadband when my phone was stopped - the fact that my phone had moved and that my broadband usage was zero made no difference to Customer Services. Well, that got me instantly ranting at the poor VM person, so I got nowhere fast after that. Have formally complained to Ofcom and to Virgin, and now warning others on various sites - hopefully someone will be helped by this post. I wonder how much VM makes from this little 'loophole', especially given many people won't know the difference between the networks. I doubt this is offset much by customers who won't go back to them again.