Third of mobile owners ‘still overpaying out-of-contract despite pledge’

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0:01am, Fri 28 Aug 2020
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A third of mobile phone owners are still overpaying for bundled deals despite a pledge by operators to reduce prices, according to Which?.

Most of the country’s providers signed up to an Ofcom voluntary commitment last year that would see the price paid by out-of-contract customers reduced, so they would not be charged the same price even though the cost of the handset itself has been paid off.

But the consumer champion claims that around a third (36%) of customers whose contracts have ended in the last two months are still overpaying on their bill, after surveying 4,006 people, 856 of which had a mobile phone contract expire in the last 12 months.

Three customers are the worst affected because the company chose not to adopt the measures, Which? said, with four in 10 (43%) whose contracts had ended in the last six months saying they saw no price drop at the end of the term.

Operators who did agree to the commitment have offered different schemes.

EE and Vodafone offer a discount, but it only comes into effect three months after customers have gone out-of-contract.

While some mobile firms have taken action to end overpayments, our research suggests that others could do a lot more to ensure that customers are not being exposed to rip-off charges

Two in five (40%) users of EE say they have not seen a drop in price, while on Vodafone, it was three in 10 (31%) – however, given the three-month wait, some of these customers may not have yet seen a change in their monthly costs.

Meanwhile, out-of-contract bundled customers on O2, Tesco Mobile and Virgin Mobile are less likely to face such hefty overpayments, Which? said, as these providers told customers they would see their bills reduced to the equivalent 30-day, or best available, airtime deal.

Three responded to the research, saying it has some of the lowest prices on the market and that “applying an arbitrary discount to tariffs will not effectively tackle what really matters”.

“As the leading campaigner for easy switching for the mobile industry, we are working hard to create a market where customers are engaged and happy, by pushing for easier switching, all handsets to be unlocked, end-of-contract notifications and best tariff advice,” the firm said.

Meanwhile, EE said it is “entirely wrong” to suggest it is failing to fulfil its commitment to Ofcom’s fairness measures.

“Before the mandatory introduction of end-of-contract notifications in February 2020 we already led the industry by contacting mobile customers a number of times before their contract ended, as well as afterwards, clearly informing them of their options,” the BT-owned network said.

“We ensure customers are fully informed about their contract pricing and send reminders to encourage them to choose the right deal for them when their contract ends.”

Vodafone did not respond to the research.

Which? is urging the regulator to review whether mobile providers are truly treating their customers fairly when it comes to mobile contracts.

Natalie Hitchins, head of home products and services at Which?, said: “While some mobile firms have taken action to end overpayments, our research suggests that others could do a lot more to ensure that customers are not being exposed to rip-off charges.

“Ofcom should ensure that all providers are treating their customers fairly and have taken enough steps to stop people overpaying.”

Ofcom responded, saying: “We’re pleased the commitments we’ve secured from mobile providers are cutting bills for millions of customers.

“And our new rules on customer alerts will help reduce the number of customers paying more.

“We’re closely monitoring the impact of these changes and we will publish detailed findings in the spring.”

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