Mobile phone networks overcharging customers after contract ends
Three of the UK’s largest mobile phone providers routinely overcharge their customers by continuing to bill them for their mobile phones after they have paid for these devices in full. An estimated six million people are subject to this practice.
Consumer advocate Citizens Advice found that EE, Three and Vodafone are charging their customers an average of an extra £22 a month. This increases on average to £38 a month for customers who own premium smartphones, including the Sony Xperia XZ Premium, the Samsung Galaxy S8 and the Apple iPhone 7.
Many contracts for mobile phone services cover a two-year period, during which consumers pay monthly for their phones, which can cost hundreds of pounds to buy outright. When the contract ends, consumers then own their phones and can either stay on contract or switch to a new plan. Many are unaware that they continue to receive charges for phones that they have paid for in full, as providers do not inform them about the structure of their contracts and that they only must continue to pay for calls, data and texts.
Citizens Advice found that 36% of customers with a handset-included contract continue to pay a monthly charge for their phone after paying for it in full, and 19% do so for more than six months. Customers aged over 65 fare the worst, as 23% are overcharged for more than 12 months compared with 13% of customers under the age of 65.
As a result, Citizens Advice has asked the three providers to stop this practice. Regulator Ofcom concurred, saying that it could take formal action next year.