Mobile customers still being overcharged hundreds for handsets

One in three ‘bundled’ mobile phone customers are still being charged the full price of their contract even after paying off the cost of their handset - leaving some potentially overpaying by more than £400 a year.

People are still being charged after paying off their handset.
People are still being charged after paying off their handset.

Last year, Ofcom secured voluntary commitments from most of the big players who offer bundled deals to reduce prices for out-of-contract customers, to reflect that they should no longer be paying a charge for their handset.

However, an investigation by consumer group Which? found that different providers have taken different approaches to how these commitments are applied and the consumer champion found that around a third of customers whose contracts have ended in the last two months are still overpaying on their bill.

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The worst affected were customers of Three, which decided not to apply any discount to bundled customers when their contracts end.

For EE customers it was two in five that saw no drop in price, and for Vodafone, it was three in 10. Discounts applied by EE and Vodafone only come into effect three months after customers have gone out-of-contract, which means that some of these customers may not have yet seen a change in their monthly costs.

Natalie Hitchins, head of home products and services at Which?, said: “While some mobile firms have taken action to end overpayments, our research suggests that others could do a lot more to ensure that customers are not being exposed to rip-off charges.

“Ofcom should ensure that all providers are treating their customers fairly and have taken enough steps to stop people overpaying. In the meantime, it is really important that customers don’t wait. If you think you might be out of contract or overpaying, check your phone bills to see if you can save money with a SIM-only deal or with an upgrade to a new phone.”

A Three spokesman said: “Three has some of the lowest prices and unmatched propositions on the market. We’ve always put customers first and continue to do so. Applying an arbitrary discount to tariffs will not effectively tackle what really matters - helping customers to find a contract which is both best-suited to their needs and priced fairly is what we do.

“We allow our customers to choose what they do when they reach the end of their fixed term commitment. To ensure that they can make an informed choice, we send all customers a notification before the end of their contract which shows them what they are paying for now, what an equivalent SIM only tariff is and also a SIM only tariff based on their actual usage.”

An EE spokesperson said: “It is entirely wrong to suggest that we aren’t fulfilling our commitment to Ofcom’s fairness measures. Before the mandatory introduction of end-of-contract notifications in February 2020 we already led the industry by contacting mobile customers a number of times before their contract ended, as well as afterwards, clearly informing them of their options.

Vodafone declined to comment.

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