Many mobile phone cashback deals are a rip-off and should be banned, Which? Online says today.
The deals, where customers pay upfront for a handset and contract and then claim some or all of their money back over a period of time, sound great but are highly dubious.
Which? has received thousands of calls from members complaining that they are unable to claim their cashback.
This is either because the terms of the deal make it complicated to claim, or the firm goes bust.
Code of practice
In July this year, five phone networks – O2, Vodafone, 3, Orange and T-Mobile – promised to keep a watch over these offers when they signed up to a voluntary code of practice.
The code is endorsed by the regulator Ofcom and was introduced to reduce the number of people missing out on their cashback.
But when Which? Online checked ten mobile phone dealers’ websites in October we found that the offers on six breached the code. For example, E2save.com, which is part of Carphone Warehouse, gave just 30 days for bills to be returned, half the recommended 60 days.
When we informed the phone networks of the findings, responses varied. Orange and O2 said they would get the terms changed immediately.
Vodafone said its terms wouldn’t have changed yet because the code was still in its ‘infancy’.
T-Mobile said it reserves the right to terminate the trading agreement with dealers found breaking the rules. Although 3 has had bad publicity over cashback deals, we couldn’t find any on its network. It said that through its terms of trading with dealers, it had ‘made it difficult for retailers to offer cashback that is hard to claim’.
Call for ban
Which? Legal Service provides advice for cashback casualties to get their money back.
Which? Online Editor Malcolm Coles said: ‘We think mobile phone cashback deals that make customers jump through hoops to get their money should be banned. If cashback is offered, it should be automatic.
‘Thousands of people have already lost money through these dodgy deals, so don’t touch them with a bargepole. Ring in the new year with a cheap mobile phone deal that doesn’t include cashback.’