It’s always a great feeling to know you’ve paid off a bill. But what if you were still being charged every month for something you’d already paid off? Well that could be happening with your mobile phone contract…
New research for our Unlock Better Mobile Deals campaign shows that we’re collectively wasting a shocking £355m every year by shelling out for handsets we’ve already paid off.
That’s because nearly half of the people in our survey didn’t switch straight away when they came to the end of their contract. On average they’re paying an extra £92 each towards handsets they already own.
Vodafone, EE and Three
So how is this happening? Well, most contracts combine the cost of the tariff and the handset. But it’s not normally split out like that, so people don’t know how much each element costs or when they’ve finished paying for their phone.
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 Vodafone, EE and Three customers 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 is clear that the handset part of the bill is £25, meaning that you’ll only pay £24 per month when the contract’s over.
On a similar plan with Vodafone (4GB of data and unlimited minutes and texts) it costs £48.50 a month. However, that price doesn’t change once you come to the end of your contract and you’ve finished paying off the cost of the handset.
Overpaying for your mobile phone
If you don’t switch as soon as your contract has ended it could end up costing you around £22 for every month you go over. That’s what happened to Jeremy:
‘I was nearing the end of a two year contract that included an iPhone, so I rang Vodafone to ask about upgrading to a new handset. I was told an upgrade would be available nearer to the end of the contract – but when the contract finished, Vodafone didn’t tell me or offer an upgrade.
‘Worse, they continued to charge me £45 a month for a phone I had already paid off. I only discovered that I was overpaying when my daughter mentioned that her bill was only £15.’
We think people are being misled and, as a result, are collectively paying millions of pounds each year for a phone they’ve paid off. We’re calling on all providers to separate out the cost of the handset so you don’t continue to pay after the contract comes to an end. You shouldn’t be handing over money for nothing.
Have you ever continued paying the same amount to your mobile provider even though you’d come to the end of your contract?
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