Author Lauren Howells
New analysis from Citizens Advice has revealed that EE, Three and Vodafone, three out of the four largest UK mobile phone network providers, are charging customers extra for their handset after the cost has already been covered in their fixed deal.
Resulting in customers paying on average £22 per month extra
The national charity says that it discovered that people who chose to stay on the same phone plan after their fixed deal had finished, did not get their bills reduced, resulting in them paying, on average, an extra £22 per month for a phone that “they have already paid off”.
For those customers with more top-of-the-range handsets, such as the iPhone 7 128/256GB, the Xperia XZ Premium and the Galaxy S8, Citizens Advice found that this extra cost could be as much as £38 a month, on average.
Those on iPhone 8 256GB could face being overcharged by average of £46 per month
Separate analysis revealed that anyone with the iPhone 8 256GB model, could face being overcharged by, on average, a whopping £46 per month, at the end of their fixed term deal.
For those who cannot afford to, or do not want to, shell out for a new phone in one big lump sum, a fixed term contract, with the cost of a new handset included in the price, can be a tempting offer. At the end of the deal, customers then have the option to either stay with their network on the same contract, take out a different contract or move over to another provider.
“Monthly loyalty penalty”
In what Citizens Advice is calling a “monthly loyalty penalty”, consumers who remain on the same contract after the initial handset-inclusive fixed deal ends with providers EE, Vodafone and Three, are not getting their bills reduced.
Over 65s most likely to be “stung”
Citizens Advice found that the most likely group to be “stung” were those aged 65 years old and over, with 23% of these people with a mobile phone contract, with a handset included, remaining on this deal for more than 12 months past the end of their fixed deal period, compared to only 13% of people aged under 65.
The analysis also revealed that, overall, 36% of people with a mobile phone contract, with a handset included, appeared to stay on the same contract after the end of their fixed deal period, with 19% remaining on the same contract for more than 6 months after this point.
Citizens Advice says Ofcom and government may need to become involved
Citizens Advice has requested that all providers reduce their customers’ bills if they stay on the same contract after their handset-inclusive fixed term deal has ended.
It is also asking for all providers to separate out the cost of mobile phone services and the cost of the handset, so that consumers are able to compare the costs of contracts more easily and says that it’s “important that Ofcom and the government are prepared to protect consumers by making providers take these steps, if they do not do so themselves.”
Chief executive of Citizens Advice, Gillian Guy, said: “Some of the largest mobile phone providers are routinely overcharging their loyal customers. Mobile phones are now an essential part of modern life, but the way that the cost of handsets are hidden within some mobile phone contracts gives phone providers a way to exploit their customers.
“It is clearly unfair that some phone providers are charging loyal customers for handsets that they have already paid for. It’s especially concerning that older customers are more likely to be stung by this sharp practice.”