The individuals were identified by the music industry body, the BPI, as part of a wider investigation into the sharing of music files over the internet.
The BPI's Matt Phillips supports a letter campaign
The record industry wants all broadband companies to cut off users that continue to swap copyright songs on sites like the Pirate Bay and Isohunt.
Letters seen by Newsbeat came in an envelope labelled "Important. If you don't read this, your broadband could be disconnected."
Virgin now claims that phrase was a "mistake" and it is running an "education-only" campaign that does not make any sort of judgement about the activity of its users.
Asam Ahmad from Virgin said: "It is important to let our customers know that their accounts have been used in a certain way but we are happy to accept it may not be the account holder that's involved.
"It could be someone else in the family or someone living in a shared house. It could even be someone stealing wi-fi. We are not making any form of accusation."
In theory the BPI could still take legal action against individuals it thinks are sharing files online. But Virgin says it will not share the names of identified customers with the music industry body "under any circumstances."
But some Virgin customers have told Newsbeat they are unhappy with the campaign.
Will McGree talks about the letter he got from Virgin Media
Keith from Wimbledon said: "Virgin is there to perform the service that I pay for. If they are not going to let me view or download what I want, I will move across to another company."
Newsbeat went to see one of the 800 Virgin customers who have already been sent a warning letter.
Will McGree was living with his girlfriend and two flatmates in a shared house in Cardiff.
He received a letter in June claiming that his account had been used to copy a single Amy Winehouse track from a file-sharing network.
Will told Newsbeat the date and time of the alleged download did not add up.
"It was at 8am on a Tuesday morning," he said. "I checked with my flatmates and we can all guarantee we haven't copied anything, especially not this track.
"I suppose it is possible that someone accessed our wireless network from outside the flat but, beyond that, it definitely wasn't one of us.
"The campaign is doomed to fail. Virgin will lose a lot of customers over this because people don't like to be accused of stealing music over their morning coffee.
We are protecting our customers' interests by making them aware of the issue
Asam Ahmad from Virgin
"It made me feel betrayed. I was under the impression that I paid a broadband company to keep my internet connection protected from organisations like the BPI."
Asam Ahmad from Virgin said: "We are protecting our customers' interests by making them aware of the issue, so they can make an informed decision about how their connections are used.
"We want our customers to enjoy music safely and without the risks associated with sharing music without permission."
Both the music and film industries are increasingly worried about the growing popularity of file sharing networks on the internet.
According to a recent survey by another organisation, British Music Rights, 63% of 14-24 year olds in the UK say they swap files using a system like BitTorrent while 42% have let other users upload music from their own computers.
The music industry has been lobbying the government to force broadband companies to do more to stop file- sharing.
Ministers have now set a deadline of next Spring for both sides to come to a voluntary agreement or it says it might push through new laws to force the issue.
Virgin Media is the first major broadband company to co-operate with the BPI in a meaningful way, although both BT and Tiscali have sent a small number of warning letters to customers in the past.
Other providers have refused to sign up to the scheme.
The boss of Carphone Warehouse said earlier this year that: "We do not control the internet nor do we control what our users do on the Internet."
The BPI has told the BBC it could decide to take broadband companies to court if they continue to ignore illegal downloading.
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