Mobile networks ‘rip you off’ after your contract ends

Vodafone, EE and Three have been accused of ripping off customers by continuing to charge them for phones even after the cost has been paid off.

Research from Citizens Advice found that customers who don’t sign up to a new contract are paying an average £22 extra a month. People aged over 65 were the most likely to be hit, with 23 per cent staying on their contract after the fixed period ends.

Gillian Guy, chief executive of Citizens Advice, said: “The cost of handsets are hidden within some mobile-phone contracts giving phone providers a way to exploit their customer”.

The majority of those whose contract includes the cost of the phone pay it off over two years. Citizens Advice called on phone providers to reduce monthly bills for customers who stay on their contract to reflect the fact they have paid for the phone.

It also said networks should tell customers when they have paid for their phone, an appeal backed by the Government. Minister for Digital Matt Hancock said: “It’s only right that mobile customers should be notified when they have paid off the price of their handset, and that their future bills should reflect this”.

Guy added that providers should make it easier for customers to compare prices by stating the cost of the phone separately from the tariff cost (data and minutes).

All three networks defended their policies. Vodafone said that “wherever possible” it gives customers nearing the end of their contract several options, including a SIM- only plan.

Three said it makes the contract’s end-date “very clear” when customers sign up, while EE claimed that separating the phone and tariff costs sometimes results in customers paying more.

Customers can ask for compensation only if it wasn’t made clear in their contract that they would continue paying the same price when it ends.