Advertisement

Make sure you're not getting stiffed by your mobile phone company

It's not just the financial services industry that makes a habit of overcharging its customers. Mobile phone companies do it too, says Merryn Somerset Webb. But you don't have to stand for it.

180920-mobile-phone-companies
If you're overpaying on your mobile phone contract, call, cancel and complain.

Charging you for things you don't need; not quite explaining to you that you are being charged for those things; feigning innocence when caught all sounds a bit high street bank doesn't it? Bad news: your mobile phone company has been at it at it too.

Most mobile phone deals are sold on two year contracts. You sign up to a deal that commits you to paying a set amount every month for the full period, part of which is in payment for the phone itself. At the end of the two years you own the phone (so the credit part of the arrangement comes to an end). You should then be charged only for your data and phone usage or so you would think.

Advertisement - Article continues below

Turns out that's not how it works. Citizens Advice has released a study showing that the three big mobile providers (EE, Vodafone and Three) continue to charge those who don't actively apply to change their deal for the phones they already own (that's 36% of people). How much? On average £22 a month.

But that number could soon rise rather sharply: those currently on a deal that includes the purchase of an iPhone 8 could find themselves paying up to £46 a month for a phone they already own if they don't change deal when their contract ends. How's that for an inertia penalty?

The companies say that they send out notices when contracts end to let people know and suggests that it is up to them to change their deal. That sounds like a reasonable-ish justification for double charging. But it isn't really.

The situation only comes about in the first place because the providers have long got away with hiding the cost of the handset in the overall price (I would defy anyone who has even spent half an hour in an EE shop trying to get a new phone sorted to have any idea of the breakdown of the final price).

If this industry was being endlessly bothered to produce more transparency in its pricing as the banking and asset management industries are and as Citizens Advice suggests it should be they would no longer be able to do this.

It is time to start bothering them. But before you sit down to write to your MP on the matter, check your own contract. Are you overpaying? If you are, call, cancel and complain.

Advertisement
Advertisement

Recommended

NS&I: a safe home for savings
Savings

NS&I: a safe home for savings

State-backed National Savings & Investments is ready to accept much more money and offers some of the highest interest rates.
28 Jul 2020
Want a pet? Watch out – they are a pricey proposition
Personal finance

Want a pet? Watch out – they are a pricey proposition

Dog and cat ownership is booming. But before you invest in a furry friend, consider how much it costs to buy, feed, care for and insure one.
22 Jul 2020
Covid-19 has caused a spike in divorce – here's how to cope
Personal finance

Covid-19 has caused a spike in divorce – here's how to cope

Lockdown has caused a spike in people filing for divorce. But splitting up involves some arduous administrative tasks. Here's what to do.
14 Jul 2020
Look beyond cash Isas to stocks and shares
Stocks and shares ISAs

Look beyond cash Isas to stocks and shares

Interest rates on cash Isa accounts are too low and stocks do better over the long term. Consider a stocks and shares Isa instead.
7 Jul 2020

Most Popular

Don’t despair on dividends – these companies could be set to bring them back
Income investing

Don’t despair on dividends – these companies could be set to bring them back

The value of dividends paid out by UK stocks has plummeted this year as companies “rebase” their payment policies. But things could soon start to look…
6 Aug 2020
Platinum: the precious metal that looks set to play catch-up with silver and gold
Silver and other precious metals

Platinum: the precious metal that looks set to play catch-up with silver and gold

Gold and silver continue to soar, but there's still time to get in. And there's another precious metal that looks set to go on a bull run too, says Jo…
7 Aug 2020
The MoneyWeek Podcast: how to age well and profit from the “longevity dividend”
Investment strategy

The MoneyWeek Podcast: how to age well and profit from the “longevity dividend”

Merryn talks to economist and author Andrew J Scott and discusses how we can profit from the "longevity dividend" as we live longer; why we need to re…
6 Aug 2020