MOBILE users are being overcharged by an average of £22 a month – or £264 a year – when their contract comes to an end.
Customers are often unaware they are being charged for handsets after their contracts have ended, even though they technically now own the phone and only need to continue paying for calls, texts and data.
According to research from Citizens Advice, this has led to an estimated 4million people in the UK being charged for phones they already own.
And those with fancy new phones pay more – the charity found that iPhone 7 or Samsung Galaxy users could be overpaying up to £38 a month – or £456 a year.
Citizens Advice is calling on EE, Three and Vodafone, in particular, to separate out the cost of the mobile service and the cost of the phone – something that O2 has done since 2013.
Gillian Guy, chief executive of Citizens Advice, said: “It is unacceptable that mobile providers are knowingly overcharging customers for phones they already own.
HOW TO CUT YOUR MOBILE BILL
FIRSTLY, decide if you’re happy with your current deal and whether you want a new deal or handset – or both.
If you’re outside the minimum term of your contract then you can leave penalty free – and you might be able to find a cheaper deal elsewhere.
Pay-as-you-go deals are better for people who don’t regularly use their phone, while monthly contracts usually work out cheaper for those who do.
The best way to find a new deal is by checking comparison websites, such as MoneySuperMarket and uSwitch.com, which compare tariffs and handset prices.
It’s also worth trying Billmonitor – it matches buyers to the best pay-monthly deal based on their previous bills.
It only works if you’re a customer of EE, O2, Three, Vodafone or Tesco Mobile and you’ll need to log in with your online account details.
If you’re happy with your provider then it might be worth using your research to haggle a better deal.
“We’ve heard a lot of talk from government and the regulator but now we need action.
"Other companies have already stopped doing this so we’re looking for these three major providers to follow suit.”
EE, Three and Vodafone told The Sun that they provide clear notifications to customers when their contract is coming to an end and the options they have to upgrade or move to a Sim-only deal.
Vodafone added that from next month, it will give extra data to customers who choose to stay on their contract after the end of their minimum term.
Three added that it is "investigating how we can extend the type of tariffs that we offer", while EE said separating the cost of phones and tariffs is "overly simplistic and doesn’t give the customers either the transparency or the best deal".
Ernest Doku, mobiles expert at mobile comparison website uSwitch, also doesn't believe flexi tariffs are the answer. He said: “Citizens Advice is right to call for more transparency in how much mobile users pay for their contracts.
"But championing tariffs that split the cost of the phone and the service still risks seeing consumers paying considerably more than they should for their airtime.
“The concern with these ‘flexi’ tariffs is that providers charge a premium for these deals – up to 38% extra – meaning that consumers could end up paying £231 million more than they should on the airtime part of the deal alone."
Telecoms regulator Ofcom is currently consulting on how to address mobile users being overcharged and has proposed the idea of sending of a text to notify customers before their contract ends.
Commenting on these plans, Mr Doku said: “Ofcom’s proposals to introduce notifications telling consumers that their deals are coming to an end is a far more practical and speedy way to address some of these problems."
But Citizens Advice says this "doesn't go far enough".
An Ofcom spokesperson said: “We share concerns about customers paying more than they need to.
"People are not being given the information they need about their contracts, so we’ve set out plans to force companies to tell customers when their minimum contract ends.
"We’ll continue to work with Citizens Advice, Government and mobile providers and consider any necessary further action.”
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