CONSUMER inertia is costing us £355m for phones we have already paid for. Isn’t it time we took the phone firms to task, asks Richard Lloyd
Almost £1 million is wasted every day by people paying for phones that they have already bought – and Scottish consumers are picking up a sizeable chunk of that bill.
Nobody likes paying over the odds, and being charged for something we’ve already paid for is even worse. Yet that is the situation thousands of Scots find themselves in when it comes to their mobile phones.
The way most of us get hold of new handsets is different from the way we buy many big-ticket items. When we take out a contract for a handset, we’re spreading the cost over several months, much as we would when we’re buying something on hire purchase.
When we buy a new car, TV, or sofa, we quite reasonably expect to stop paying for it once we’ve made that all-important final payment. We don’t have to get in touch with the company we’ve bought the goods from to remind them of this.
But the unusual way mobile phones are marketed means that, in many cases, customers continue to be charged until they contact the phone company and ask to switch contracts, even if they’ve paid off the cost of their phone months beforehand.
Most contracts combine the cost of the tariff and handset and this is not always split out, so people are in the dark about how much each element costs, or when they have finished paying for their phone.
Of course, we could all be better at keeping on top of these things and switching to a better deal as soon as the old one expires, but the reality is that many of us forget, or don’t get round to doing it as life throws up other issues to distract us.
Almost half of the people Which? surveyed said that they do not switch immediately and this inertia ends up costing us dear.
On average, this is leaving individuals out of pocket by £92 each year, with people across the UK shelling out an incredible annual total of £355m for phones they’ve already paid off.
As always, whether you get stung or not depends on which company you’re with. O2, Tesco Mobile, Virgin Media and Utility Warehouse have tariffs where the airtime and handset costs are separate while giffgaff has never bundled the two costs together. But customers on Vodafone, EE and Three still continue to be charged one bundled price.
For example, a contract with O2 Refresh for an iPhone 6 costs £49 a month for 5GB of data and unlimited minutes and texts. Of this, O2 is clear that the handset part of the bill is £25, so when the contract is over you only pay £24 per month. On a similar plan with Vodafone (4GB of data and unlimited minutes and texts) it costs £48.50 a month – but that price doesn’t change once you come to the end of your contract and have finished paying off the cost of the handset.
Only 37 per cent of Scottish consumers we asked last month told us they trust the mobile operators to act in consumers’ best interests. Which? wants to see an end to smoke-and-mirror bills and has been urging phone companies to play fair, making sure customers are not paying over the odds.
So far more than 56,000 people have signed our Unlock Better Mobile Deals petition, which is calling for all mobile phone operators to separate out the costs of handsets in bills and let customers know at least a month in advance that their contract is coming to an end, as well as providing them with information on the best new deals that meet their needs.
We also want all handsets to be unlocked automatically, for free, once a contract comes to an end. This will get rid of one of the hurdles putting people off switching if other operators are offering them a better deal – after all, it’s their phone – and they should be able to do what they want with it once it’s paid for.
Anyone wanting to see the phone companies take action can find out more about getting involved in our campaign or signing our petition on the Which? website at www.which.co.uk. The more of us join together to demand change, the quicker it will arrive.
• Richard Lloyd is executive director of Which? which.co.ukg