Patricia Gibson, MP for North Ayrshire & Arran and SNP Spokesperson for Consumer Affairs, has secured a debate in Parliament on 16 January to examine mobile phone contracts. The debate follows concerns that mobile phone providers are routinely overcharging customers for handsets they have already paid for.
Many people take out a mobile phone contract with the cost of the new handset included in the overall price of the fixed term deal, the majority of which are paid off on a monthly basis over two years.
Analysis by Citizens Advice found that customers of Vodafone, EE and Three who stay on the same phone plan after the fixed deal ends do not get their bills reduced, meaning that hundreds of thousands of customers are still paying for a phone they have already bought.
Mrs Gibson said:
“It is unacceptable that customers unknowingly pay for mobile phones they have already paid for. Consumers are being ripped-off by some of the largest mobile phone providers in the country. Some networks are overcharging loyal customers an average of £22 a month, and considerably more for the higher-specification handsets.
“Weeks ago I wrote to each of the companies concerned asking them to immediately end this sharp practice. They are making millions they have no right to. In defence they point to their terms and conditions - which are clear if one reads the (very) small print - but when one in five customers is still being charged for their handset six months after it has been paid for, that is both wrong and a breach of trust. Older customers who are less likely to upgrade their phones after two years are most likely to be affected.
“It should be much easier for people to compare prices with handset costs separated out from services like data and minutes for all contracts. This would allow people to see clearly what they are actually paying for.
“If mobile phone companies are unwilling to make this change, the UK Government and industry regulator Ofcom must step in to ensure this overcharging is immediately discontinued.”
Citizens Advice examined pay-monthly handset-inclusive contracts offered by Vodafone, EE, and Three across 12 handsets, and compared it to SIM-only tariffs offered by each provider.
Figures for the percentage of people with a handset-inclusive mobile contract who stayed on their contract after their fixed term period ended are from a survey run by Populus for Citizens Advice, carried out between 10th-14th June 2017.