People have been warned to be wary of cash back mobile phone deals promising refunds that may never materialise.
Citizens Advice says its has seen increasing numbers of people who have had problems with these deals.
Typically, the sales pitch promises they will be able to claim back most of the money they pay out in monthly bills, making it appear much cheaper than other contracts on offer.
But Citizens Advice says they often miss out on the promised discount completely and end up paying the full rate – or even being chased by debt collectors and threatened with court.
Cash back deals
In one case a person signed a contract with a mobile phone company offering a monthly cash back deal of £65, slashing the cost from £75 a month to £9.99. After six months the company went bust, and the network provider was demanding full payment of £75 a month.
Citizens Advice says the cash back offer is not part of the contract signed with the service provider who does the billing – it’s a separate contract with the shop selling the cash back package.
The charity says that many cash back deals have complex terms and conditions buried in small print, and claiming cash back from them may not be as simple as consumers are sometimes led to believe.
It has heard of another person who received a letter from his mobile phone company telling him that because he had missed the date for applying for his first cash back payment, all future cash back payment claims would be invalidated.
When he checked his contract he found this was one of the terms, but it had not been made clear to him when he signed up to the deal.
Citizens Advice Consumer Affairs Social Policy Officer Susan Marks said: ‘Some cash back deals work well for mobile phone users who sign up to them. But we are seeing growing numbers of people who lose money. People are attracted to these deals because they appear to work out much cheaper than other mobile phone packages, but once the money is handed over it can prove impossible to get it back.’
Telecoms regulator OFCOM is monitoring the situation and Citizens Advice is urging anyone who has experienced problems with a mobile phone cash back deal to report this to OFCOM’s contact centre on 020 7981 3040 or email firstname.lastname@example.org
However, OFCOM cannot resolve individual problems. Consumers should report these to their network provider, who may be able to help, or consult their local Citizens Advice Bureau.