Loyal customers being overcharged by mobile phone networks

Mobile phone networks in the UK are overcharging loyal customers every month, with three of the four largest networks continuing to charge customers extra for a handset long after this cost has been covered by their fixed term deal.

Research by Citizens Advice found that EE, Three and Vodafone customers who choose to stay on the same phone plan after the fixed deal ends do not get their bills reduced, meaning customers are paying on average £22 extra a month for a phone they have already paid off.

For premium-end handsets like the iPhone 7 128 or 256GB models, the Galaxy S8 and the Xperia XZ Premium, the extra cost can be as much as £38 a month, and analysis shows that customers who pick up the iPhone 8 256GB model could end up being overcharged by almost £50 a month.

According to Citzens Advices research, people aged over-65 are most likely to be stung by these charges, with 23 per cent of over 65s with a handset-inclusive mobile phone contract staying in the same contract for over 12 months past the end of the fixed deal period, compared to 13 per cent of people aged under 65.

Overall, 36 per cent of people with a handset-inclusive mobile phone contract stayed in the same contract after the end of their fixed deal period, with 19 per cent staying in the same contract for over six months after.

“Some of the largest mobile phone providers are routinely overcharging their loyal customers,” said Gillian Guy, chief executive of Citizens Advice. “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.

“Phone providers must now make sure that any customers staying in a contract past the end of a fixed deal have their monthly bill reduced to reflect the cost of the handset. Providers could make it much easier for consumers to compare prices by separating out the cost of handsets from the cost of services like data and minutes for all contracts, that way it would be much clearer what theyre paying for. Its important that Ofcom and the government are prepared to protect consumers by making providers take these steps if they do not do so themselves.”

Join us at the 2017 Effective Mobile Marketing Awards Ceremony, taking place in London on Thursday 16 November, to mix with the industrys best and brightest, and raise a glass to the years best campaigns and solutions. To find out more, and to book your place, click here.