Mobile phone users overpaying by £100m a year because they fail to switch deals when contract expires
Mobile phone users are being hit by a £100 million-a-year loyalty penalty.
Customers who fail to switch to a new deal when their contract expires routinely overpay each month.
This is because they are still being charged for their handset when they should be paying only for calls and data.
Tens of thousands of loyal mobile customers are unaware they are still being charged for their handset when they should only be paying for calls and data
Yet tens of thousands of loyal mobile customers are unaware of the rip-off, warns Citizens Advice.
Its research revealed one in three mobile customers whose contract has ended since lockdown started in March 2020, has not switched to a cheaper tariff and could be overpaying hundreds of pounds a year.
In a survey of more than 4,000 adults, one in four said they found the prospect of shopping around for a new deal ‘confusing, stressful or overwhelming’.
In one case, Graham, a 60-year-old father from North Devon, discovered he had been overcharged £600 for a mobile phone he’d paid off three years earlier. ‘I feel as though they have stolen from me,’ he says.
Following a super complaint from Citizens Advice in 2018, the telecoms watchdog Ofcom pledged to clamp down on the practice.
But, so far, only three providers, 02, Virgin Mobile and Tesco, have committed to stamping out the loyalty penalty.
Vodafone and EE offer small discounts, of £5 and 10 per cent respectively, after three months of customers’ contracts ending. Three does not offer any reduction.
Citizens Advice is calling on the Government to intervene, and estimates the loyalty penalty is costing customers £113 million a year.
An Ofcom spokesman says: ‘We’ve used our powers to make switching easier, and required providers to alert you when your contract ends.’
A Three spokesman says it has some of the best deals on the market and that applying ‘an arbitrary discount’ does not help customers find a contract that is best suited to their needs.
Vodafone and EE say they remind customers their contract is coming to an end to ensure they are aware of their options.