Mobile networks overcharging loyal customers

It’s fairly obvious to many. You go and buy a new mobile phone. It’s on a two year contract. You probably pay about £38 per month for it. As you near the end of the two years, you’re itching to upgrade to the latest handset.

Unless you’re with a network like giffgaff or you’re on a plan which splits the airtime and the phone cost (like O2 Refresh), the cost of the phone and the cost of the data, call and text plan is bundled together in one price.

For those who don’t want to change their phone at the end of the two-year deal, it makes sense to switch to a SIM only plan. There’s a load to choose from on comparison sites and you can even stay with the same network if you wish. It means that you instantly chop away that part of your monthly price which pays for your phone.

You’d think that the majority of people would be aware that contracts on EE, Vodafone and Three had the cost of the phone bundled into the price and you’d assume they would simply upgrade or switch to a SIM only deal at the end of their two year deal. However, with our busy lives and with a lot of people simply happy with their phone, the direct debits continue to go out.

Indeed, according to the CAB research, 36% of people with a handset-inclusive mobile phone contract stayed on that same contract after the end. Some 19% were still doing that for 6 months afterwards.

This means that those customers are paying on average an £22 extra every month for a phone they have already paid off.

Daft, right?

But is it our own fault for not remembering and not doing anything about it? Are we just continuing to pay because we know that the next iPhone will be out shortly, and it’s just a bit of a faff?

Well, the CAB quite rightly point out that EE, Three and Vodafone should perhaps consider removing the cost of the phone once it’s paid off and the deal is complete. It should be their responsibility, not ours.

Whilst you might agree with this, the mobile networks have responded by saying that their prices are fair and that they do contact customers to tell them when their contracts are complete.