Consumers are wasting £355m a year by unwittingly continuing to pay for mobile phone handsets they have already bought, according to Which?
The consumer group found that 46% did not switch immediately they came to the end of their mobile phone contract - meaning they overpaid by an extra £92 on average for their handset.
Most monthly contracts combine the cost of the tariff and the handset over the minimum term, typically 24 months. But this is not always separated out, so people do not know how much each element costs or when they have finished paying for their phone. Six in 10 of the 2,000 people surveyed by Which? said a provider that made tariff and handset costs separately clear on the bill was important to them when switching.
O2, Tesco Mobile and Virgin Media have tariffs where the handset and airtime costs are separate while giffgaff has never bundled the handset in. Customers on Vodafone, EE and Three still continue to be charged one bundled price.
As part of its Unlock Better Mobile Deals campaign, Which? wants companies to routinely unlock all handsets for free. It is also urging providers to improve their customer notification, giving at least a month’s notice that the contract is coming to an end and details of the best deals.
Nearly all those surveyed (97%) said price was important when looking to switch, while providers alerting customers that their contract is coming to an end also ranked highly (74%).
Richard Lloyd, the Which? executive director, said: “Consumers are being misled and as a result are collectively paying millions of pounds each year for a phone they have paid off. All mobile phone operators should separate out the cost of the handset so people don’t continue to pay after the contract comes to an end. Mobile providers need to play fair and ensure their customers are not paying over the odds.”
