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.
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