George Osborne has announced action on mobile phone locking in today’s Budget.
The Chancellor confirmed in the Budget 2016 that the Government will consult on ending the practice of locking phones after your contract has ended. And it has committed to consulting on this this very year.
He added that the Government welcomes voluntary commitments from mobile phone providers, but said that it is ready to introduce legislation if necessary.
You shouldn’t have to pay to unlock a phone you already own, so we’re pleased to see that the Government is consulting on this. However, there needs to be no delay in bringing in the changes. If you agree with us, then please sign our petition.
Mobile phone owners are collectively shelling out an extra £355m per year for handsets they’ve already paid for.
Our research found that nearly half of mobile owners don’t switch immediately when their contract comes to an end. And since most contracts don't separate the cost of the handset from calls, texts and data, you’ll find yourself paying over the odds for a phone you’ve already paid off.
Collectively we’re overpaying by a total of £355m a year - an average of an extra £92 each.
O2, Virgin Media, Tesco Mobile and Utility Warehouse have tariffs where the handset and airtime costs are separate, while giffgaff has never bundled the handset in. Whereas customers on Vodafone, EE and Three still continue to be charged one bundled price.
For example, a contract with O2 Refresh for an iPhone 6 costs £49 a month for 5GB of data and unlimited minutes and texts. Of this, O2’s clear that the handset is £25, meaning you’ll only pay £24 per month when the contract ends.
On a similar plan with Vodafone (4GB of data and unlimited minutes and texts) it costs £48.50 a month – but that price doesn’t change once you’ve come to the end of your contract. If you don’t switch or change your contract, you’ll keep paying for the phone you’ve already paid off.
Our executive director Richard Lloyd said:
‘Consumers are being misled and as a result are collectively paying millions of pounds each year for a phone they have paid off.’
We’re calling on all mobile providers to separate out the cost of the handset so you don’t continue paying for it after your contract comes to an end. You shouldn’t be handing over money for nothing. If you agree, please sign our petition today.
Major mobile phone companies agreed with the Government in December 2013 to introduce a liability limit to protect customers from excessive costs if their phone was used fraudulently when it was lost or stolen.
However, more than a year later, Vodafone, O2, EE and Virgin have failed to implement a limit. While Three's customer liability is capped, customers will still have to pay the first £100 if the loss or theft is reported within 24 hours.
We found that a third of people with a mobile phone contract would find it difficult to cope with an unexpected expense of £100, and six in 10 think they should not have to pay any of the costs incurred from fraudulent use when their phone is lost or stolen.
Our executive director, Richard Lloyd, said:
'People should not have to foot the bill if criminals run up expensive charges when their phone is lost or stolen. Mobile firms agreed to introduce a limit on excessive costs over a year ago but have still not implemented safeguards that really protect their customers.
We think mobile firms need to give customers 48 hours to report a lost or stolen phone. Our research found that a quarter of people said they have accidentally left their phone somewhere for a whole day or overnight in the last two years.
Which? Conversation user Mike was faced with a huge bill:
'My phone was stolen abroad earlier this year and despite being locked, the Sim was used to rack up over £2,000 in a few hours before I could report it stolen.'
Richard Lloyd added:
'Consumers are already losing out to the tune of more than £5bn by not being on the best mobile deals. With people fast losing trust in mobile operators, it's time for the industry to keep its promise and ensure that no one is faced with more unfair cost through no fault of their own.'
New proposals from the Government will protect consumers from huge bills run up on stolen mobiles.