We pay £92 a year for phones we already own

MILLIONS of people are wasting money on rip- off mobile phone tariffs which mean they are paying for smartphone handsets they already own.

Consumer group Which? estimates consumers are overpaying by an average of £92 a year each, totalling £355million nationwide.

Most contracts include a fixed monthly payment that covers two elements – the cost of buying the device and the use of the services, such as calls, texts and access to the internet.

the contracts generally run for 24 months and once that period has elapsed customers have fully paid off the cost of the handset. this element of the bill should then be removed, however Which? has found many people continue to pay the original figure.

It has put ee, Vodafone and three in the dock for failing to break out the two different elements of the monthly charge on bills and then refusing to cut the bill when the contract has elapsed.

By contrast, o2, Virgin Media, tesco Mobile and Utility Warehouse have tariffs where the handset and airtime costs are kept separate. the virtue of this is that consumers are given a trigger to start looking for cheaper call and data services when their contract ends.

Which? praised the o2 refresh contract, which costs £49 a month and includes an iPhone 6 plus 5GB of data and unlimited minutes and texts.

o2 is clear that the handset part of the bill is £25, so when the contract is over the monthly charge drops to £24.

Vodafone said: ‘We’re clear with our customers on when their contract ends. At the end of the contractual period customers are able to take a new handset or move their contract to a SIM-only plan.’

three said: ‘At the end of their contract, customers can upgrade to a new handset with a new plan, switch to a SIM-only plan where they pay only for airtime and not a handset or move to another operator. We are looking at developing new contracts which will split out the cost of the handset and the airtime.’

ee said: ‘our customers have the flexibility to choose the tariff and upfront phone cost that’s right for them, often with better value than tariffs that are separated.’