/ Technology

Are you wasting money on a mobile you already own?

Mobile emojis

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?


Why do people insist on acquiring subsidised phones from the networks instead of buying them outright? I don’t expect Sky or TV Licensing to subsidise my television. I don’t expect my ISP to subsidise my laptop. I don’t expect oil companies to subsidise my car. Why do consumers expect mobile networks to subsidise their handsets?

I would like to see unbundling of the goods and the service to promote competition and transparency. We need an end to the cost of mobile phones being subsidised by monthly charges because this:
– Encourages consumers to acquire handsets they cannot truly afford through an unhealthy “buy now pay later” consumer debt culture with a disguised loan from the mobile network.
– Distorts competition by disguising the true price of the handset and of the service, as opposed to a SIM-free handset and SIM-only service.
– Encourages wasteful acquisition of new handsets because consumers mistakenly believe they are receiving the handset for free or for very little.
– Necessitates long contract durations in order to spread the cost of the handset, which inhibits competition by preventing consumers from switching networks.
– Causes consumers to continue paying the inflated monthly charge even after they have paid off the subsidy of the handset, unless they remember to take action at the end of the minimum contract period.

Subsidised handsets are usually SIM-locked which:
– Inhibits competition by making it more difficult to switch networks.
– Prevents consumers from using local SIM cards abroad, allowing UK networks to impose unreasonably high roaming charges by excluding foreign competition.

Ideally the norm should be that consumers buy their handsets from a third party (e.g. Apple) and obtain a separate SIM-only monthly contract from a network that charges them only for their consumption at reasonable prices, e.g. 1p per megabyte. We need an end to monthly bundles which disguise loans for subsidised handsets.

I very much support separating the purchase of the handset from the cost of the provision of services, for the reasons that you have given.

Having said that, I don’t accept that contracts that include a handset ‘free’ or at a subsidised price are necessarily poor value for money. There are some very large discounts available in the messy world of mobile phones and some manage to find them, even if most people only think they are getting value for money.

I was interested by your comment about wasteful acquisition of new handsets. Does that mean you are going to hold on to your iPhone 6 when Apple launches its new model?

I aim to buy a new iPhone every time Apple releases a new shape, i.e. the 4, 5 and 6, which is approximately every two years. Unfortunately Apple’s release cycle is based on a similar culture in the United States where 24-month contracts are common. My point is that many consumers wait until the end of their minimum contract term and then say “I’m due an upgrade” rather than moving to SIM-only. For the same reason, those consumers won’t buy a new handset outright while they are still within the minimum contract period for the service. They have been conditioned by the mobile networks into acquiring a new handset every 18 or 24 months, regardless of whether that is the appropriate time to acquire it; this is wrong.

From an environmental point of view, buying a new phone whenever Apple or another manufacturer brings out a new model is another way of ‘wasteful acquisition of new handsets’.

It’s not quite the same. When Apple release a new shape of iPhone, it’s nearly always a big jump in technology with significantly superior hardware. This is in contrast to those who acquire a new handset only because they believe they are entitled to one “for free”, not because of any advance in technology, so they just take whatever is available. Some of these people take an iPhone just weeks before Apple launches a new model, when it reduces all the prices by one price point.

Sorry, I had assumed that ‘wasteful acquisition’ referred to environmental responsibility, whereas you are referring to buying products that are obsolescent.

I will carry on with my old shape iPhone (probably a 5S) and maybe look at the iPhone 8.

No, I meant wasteful in many ways, including to the consumer’s pocket. If the consumer acquires a new handset mainly because they believe it is free, rather than because they specifically want that particular new handset, then it is wasteful.

Ro Atkinson says:
16 April 2015

The answer is that people don’t insist upon it. People are misled into believing that they are getting a good deal. I remember an argument I once had with someone who had simply thrown their phone in a drawer because it was too complicated to use. I told her that she ought to sell it if she didn’t want it so as to recoup the cost. She didn’t seem to be able to understand that the phone wasn’t free. In the end I had to give up trying to explain that it was subsidised. It is not the people that demand subsidised phones, it is the companies that can use them to pull in customers.

Cloudy says:
24 July 2017

Lol. Its not subsudising phones. Its offering a fairer cost!
Most phones only cost the company about £15 to actually make….. Yet they sell it for 100s.
And the factory workers will be paid a pittance too.

Over charging, poor signal and nothing done about it, High cost of replacement handsets

Vanessa wrote: “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.”

Some time ago I was discussing phone contracts with a friend. She had signed up to a two year contract with O2 via her employer. At that time it was a very good deal, but she just continued paying by direct debit at the end of the contract, probably because of having to cope with moving an elderly parent into care. As a result of our discussion she switched to a much cheaper SIM-only contract with O2.

It’s just the same with insurance and savings account. For one reason or another, customers who don’t keep a track on payments lose out.

I totally agree Vanessa, but this is just one case of businesses cheating their customers, a common theme to many of our discussions on Which? Conversation.

Many of us are aware that service providers may charge extortionate rates for those who use more than their allocation, or end up with bills of hundreds or thousands of pounds for using their mobile when abroad, though it looks like that is going to be dealt with.

It would take a lot to convince me that Ofcom is doing much to regulate the activities of mobile service providers.

dozyfiend says:
15 April 2015

My son is paying £40 a month for a iphone contract he can’t rteally use, he has virtually no reception at home in Penzance, for calls or Wifi also very poor reception out and about. He moved down from London where his reception was good, 3 have offerred him no help what so ever. Recently his phone stopped charging, he had to take it to an Apple shop in Plymouth (90 miles away) or London even further. Very poor service it appears to be his own fault for moving out of London.

Why doesn’t he switch to another network then? Did he sign up to a contract that was longer than the period for which he was certain to be in London? If so, why?

Three has an excellent prepaid tariff – 3p/min, 2p/text and 1p/MB. He should have signed up to that instead, and he would have been able to switch networks as soon as he moved out of London.

Peter says:
15 April 2015

I always buy my phones second-hand (usually on ebay). Bought my wife’s new on Amazon marketplace. Both methods get excellent value. Always have SIM-only deals.

Regularly check with Vodafone for the latest SIM-only deal – usually get a ‘special’ offer to keep me loyal.

Over-riding principle: always assume that the network is working for its benefit – not yours!

Beware of buying phones secondhand on eBay. Make sure the seller has good feedback. A common scam is for the seller to sell a phone and then report it stolen in order to fraudulently claim on an insurance policy, and then its IMEI number becomes blocked by all networks, making it useless. As someone who sells his secondhand iPhones, I’m certainly not saying that you shouldn’t buy secondhand phones; just be very careful.

Noiseyv says:
15 April 2015

When I went into an EE shop to discuss my pending end of contract, I explored some options including upgrading BUT I was unable to arrange to go SIM only from the end of the contract 1. Because I had not yet reached the end (a few days), 2. Because if I went SIM only on a rolling contract I was told I would not be able to upgrade for 3 months.
Being a typical consumer (I think, with many plates in the air) I forgot to switch when the time came, and have not got around to changing or upgrading. The latter is too expensive, the former seems a hassle for the time taken.
It SHOULD be automatic to switch to SIM only pricing.

Also the providers are all using these packages where the inclusive minutes or data when exceeded are vastly more expensive to cover any difference. Why should you have to buy a contract on the basis of the worst case you are ever likely to need?

“Because if I went SIM only on a rolling contract I was told I would not be able to upgrade for 3 months” – This doesn’t make any sense. At any time, you can buy a new handset (“upgrade”) from anyone. Why would have you to buy it from EE?

Noiseyv says:
15 April 2015

You are absolutely right it does not make sense, and I should have just ignored it and downgraded, but since I have changed phones several times I was just thinking about upgrading and how inconvenient it would be if I could not upgrade when I got round to deciding which phone/contract combination I wanted to commit to for 24 months(a big decision).
Just shows they are trying to play with your mind…and succeed.

Why do you have to commit for 24 months? Just get a 1-month SIM-only contract and buy your chosen phone separately. Why not keep it simple?

Noiseyv says:
15 April 2015

You are right again. But like a lot of people I baulk at paying 600 pounds in one go. It is easier to spread it. My daughter is on giffgaff with a purchased phone and I may go the same way. But for a top phone it is a serious commitment – whether you spread it or fork out the lot in one go.

Noiseyv – If you keep a phone for three years rather than two, you will save a fair bit of money. The contract system and upgrade dates are just there to persuade you that you need the latest greatest phone.

Cars are worse. Within six months of buying a car, they were pestering me to think about my next car. I reminded them that I had traded in a ten year old car that had never let me down and suggested they call be back in nine or ten years.

Your daughter has the right approach. I use giffgaff with an iPhone 6 64GB which I bought from Apple for full price. I pay nothing for giffgaff because it’s so easy to generate “payback” from helping other customers and introducing new customers.

Would you similarly balk at paying £600 in one go for a television or for a laptop? If not, why do you do so for a mobile phone? I believe that UK consumers have been conditioned to paying for their handsets in instalments. In many other countries, it is normal for consumers to buy their handsets outright.

Alison says:
15 April 2015

Tesco mobile already do this. My 3 children all have plans with Tesco and the monthly cost is split into handset charge and call/text/data charge. They also have capped contracts so they cant go over their limit. My only gripe with them is that they now have a buffer amount starting at £2.50 which 2 of my children always use! There used to be no safety buffer, which I liked because my children always use the £2.50 (not for emergencies either!), but you have to have the safety buffer, Tesco wont let you stop it.

Janet says:
15 April 2015

I contacted Virgin Media to tell them I wanted to end my contract as I had found a deal through Carphone Warehouse for a more modern phone on contract for £4.00 less than I was currently paying. The person asked what model phone it was. She came back within 5 minutes saying that I could have the same phone with the same contract for £1.25 less than the Carphone Warehouse deal! If I had not seen the advert from Carphone Warehouse, I would probably still be paying the original charge. It can be a nuisance changing over to a new phone,,but clearly worth it.

If you think paying ‘the same’ is bad…
how about when it increases !!

I was paying 16 a month for the 1st 2 years with a handset and at the end of that minimum 2 years, having paid for the handset (effectively), the deal ended (apparently) and I was automatically charged 25 pounds/ month – explain the logic of that one !!

Mary says:
15 April 2015

My contract ens on the 20 of this month however yesterday when I said I did not want to renew, they insisted they needed 30 days notice. Plus if I wish to keep my number I must have a new provider before the 30 days elapse otherwise the contract would continue. It is with Orange, now EE, and I have yet to here about handset charges.

Mobile phone contracts don’t naturally come to an end; nor do you need to renew them. The contract might have a minimum term, but if you do nothing, it continues on a monthly basis after this.

Normally this is something that i would really get behind. But I have a confession to make….. I’ve never made it to the end of a phone contract before!

Normally I would take a contract out, then start kicking off about something in month 3 or 4, then by month 7-8 I’ve left & moved to another provider with the cancellation fee waved (I think just to shut me up).

The longest contract I’ve stuck with is the one I’m in now with Three. I took out a £24 per month contract last year for 24 months. With kicking off on Twitter all the time I managed to get it down to £20, then now I’m at £15 per month as i can’t use the phone to make a call without using the app (to make the call go over wi-fi) due to the signal being so bad.

In-fact I opened a new complaint with Three just 2 days ago (Which?, I mentioned you in the tweets too). As I’m trying to get them to remove my unlimited txt’s (as i don’t use them), and give me unlimited data instead as i’ve started listening to my music via Amazon Cloud so i need loads of data.

Contracts are pretty pointless there days when you can use Social Media to get what you want!

I may have misunderstood the points you are making – sorry if that is the case. But if you are choosing a contract and then wanting to change it – either price, what it offers – wouldn’t it be better to choose the right contract in the first place? Otherwise you are acting in a way for which we have criticised the mobile operators – changing terms mid-contract?


When I take a contract out it’s at a price I am happy with. But then spend the next few months moaning about the signal & slowly get the monthly payment down. While yes, it is wrong, I see no problems in doing this. after all, phone companies try & screw us over far too much & this is just my own way of getting back at them.

As for the end of my comment, yes, i am trying to change my contract just because I have started to use Amazon Cloud for my music, so i really need unlimited data. Over the last year i’ve been happy with having 1GB of data as i really only used Twitter/iMessage on my phone. But things change in time, hence me wanting to try & get unlimited data, but don’t want to wait till my 24 month contract is over. 2 years is a long time!

You dont have to wait for your contract to end to get a new price plan as long as the priceplan is being upgraded and not downgraded i.e. costing more per month, with three you cant downgrade until your contract ends but you can upgrade to a higher service anytime

Some people get confised between upgarding the service and the actual phone, while its true that you cant upgrade your phone before the end of the contract without paying your contract off first, this is not true for keeping the same handset and uograding the priceplan

Do let us know if you persuade your service provider to give you more data instead of the unlimited texts, Lee.

I could not cope with the old Nokia predictive text system years ago, so I did not use it. No trouble with the iPhone but it’s a service that I could live without.

The reason that many networks offer unlimited texts is that they have zero cost to the network, but inappropriately still have a perceived value by consumers. I believe that an SMS message uses 256 bytes – 160 characters for the message plus the originating and destination number and other routing data. Based on a typical out-of-bundle price of around 10p per message, this works out at an astronomical £390,625 per gigabyte! There are now so many free alternatives to SMS – for example iMessage, WhatsApp and Viber, all of which similarly send messages between mobile numbers. The networks know that SMS is now of very little value to consumers, so they give away unlimited texts as a perk.

Thanks for that. The more I learn about mobile phone companies, the less I trust them.

The out-of-bundle charges make payday loans look good value for money.


I’ve just had my phone call back from Three. I asked if i could remove my unlimited txt’s, remove my 2GB “Hotspot” (whatever that is), and give me unlimited data.

While i didn’t get fully what i wanted. As they can’t remove my unlimited txt’s or hotsport. What they have done is put on unlimited data, which means my contract will move from £15 to £21 per month, but then put on a £6 per month “loyalty bonus.”

So my monthly contract will still be £15 per month, i’ll still have everything I had before (even tho I don’t need half of it), plus unlimited data. To get this deal they have extended my contact by 6 months. But i’m more than happy with that!

Thanks Lee. It is clear to me that the advertised prices are inflated and many pay a lot less.

The ‘Hotspot’ allowance is to let you tether a laptop, tablet or other device without its own active SIM card.

valmai Fox says:
20 April 2015

very true. I find my present phone doesn’t suit me and the sales people did not really understand my needs as I am elderly.

Ro Atkinson says:
16 April 2015

What I dislike is that I have to keep a constant eye on my bank account. I have rung up to change the number of minutes etc on my accounts in the past and discovered many months later that what the staff have done is to simply give me a new account and leave my old account running. Because I have not checked my bank account I have been getting billed twice for many months. Afterwards when I point out that I did not need two accounts, my intention was that I should only have one account, that I had not even used the original account after getting the new account, there was no way I could use two different sims at the same time, that it was plain and clearly obvious that my intentions were easy to see, I had three reply to me that I could not have any refund and whats more if I didn’t pay the money back from having cancelled the direct debit for the unwanted older account they would take me to court.

Isn’t Ofcom the regulating body? What are they doing to stop this robbery?

I bought my Nokia phone for £18 from Amazon. SIM only contracts are very cheap.because they have to compete on price.

You might be interested in what Three had to say in response to our research:

‘We offer a range of plans which include a handset with different data and call allowances to suit customers’ needs. 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 already unlock devices for free and we are looking at developing new contracts which will split out the cost of the handset and the airtime for customers’

There’s nothing different about Three’s approach compared to other networks, except for free SIM-unlocking, and even that is becoming more common across the board. In any case, these devices should never be SIM-locked in the first place.

It should be mandatory for the price of the goods and the service to be separated. Unbundling is a frequent buzzword when regulating telecoms. Let’s see it happen here.

Here’s Vodafone:

‘We offer competitive pricing on both 12 and 24 month contracts which often include a handset as part of the bundle. We’re clear with our customers on when their contract ends – through customer services, their online account and the My Vodafone app.

‘We also proactively contact the vast majority of pay monthly customers before their contract ends to discuss the best possible bundle for their future needs.

‘At the end of the contractual period customers are able to upgrade and take a new handset or move their contract to a SIM Only plan.’

When a customer reaches the end of their minimum contract period, why doesn’t Vodafone automatically switch them to a 1-month SIM-only tariff with the same monthly allowances? What is Vodafone’s justification for continuing to charge the customer for a handset that they have already paid for? This is an unfair commercial practice.

Companies should alert customers that they are coming to the end of their contract and explain the choices available. If no answer is received, switching customers to a one month rolling SIM-only contract would make sense.

Any company that carries on charging the same rate when the phone has been paid for deserves to be exposed and required to issue a refund for excess charges.

Totally agree with everything you write. I ended my 24 month contract with Vodafone on 23 December 2016 and was on line trying to get an answer from their chat people why I would continue to have to pay the same amount if I have already paid off my handset! It took more than an hour and being switched between various departments in India and somewhere “Up Norf” to be told that it’s all indicated in their terms and conditions, to which I replied that they should let their customers know when they’re coming to the end of their contract and propose different options to choose from to them. Vodafone say it’s up to the customer to contact THEM instead of the other way around. Whatever, it’s a scam and indeed should be stopped. No more obscure bundles! I have now asked my PAC code to Vodafone and will leave them in 30 days’ time. Reason being: I don’t like being robbed. Am thinking of going with O2, Giffgaff or Tesco Mobile.

NFH, thank you for your advice. I have followed ur posts with interest. I have had a £39 over 24 months contract with ‘Three’ that ended in May 2015 that I just kept going as it was easy. Obviously some of the £39 was the cost of the handset, however, I have recently been made aware that I am still paying for the handset even though I already own it. No one from ‘Three’ advised me of my situation and they have actively refused to upgrade my handset as this contract is no longer available. If I had known that I already owned the phone then I would have acted differently. Can you advise as to what I should do. I would like to seek a refund for the overspend. Many Thanks.

As for me I`m not wasting money I get in from using app

[Hi Anita, we’ve amended your post so that it aligns with our commenting guidelines. Thanks, mods]

Can I claim the over paid money back. I’ve just discovered I’ve been paying £40 a month for 2 phones, when I could have been paying £16 for the last 3 months

My 2 year contact with Vodafone for a Samsung s4 mini ended in July and I’m still paying £ 42 a month! My concern is will I be credit checked again before they let me upgrade or start a new contract? I had a monthly rolling contract for a year with them first, then I was upgraded to a full contact. Always paid on time by DD. Will I have a problem? Also my bill for last month was £89.12!!!! I have unltd mins, texts, 100 mms and 1G. I didn’t go over on anything. Why have I been charged so much? Have tried consistently today to speak to them to no avail. Any advice please?

Vodaphone had me off too. I am two months out of pocket and after much debate, they offered me one month off my next bill. I insisted they owed me two. They said they were only offering me one month out of good will as I have been a valued customer for five years, I should add, both my wife and I, in the same house have never missed a payment in five years, more in her case yet, they wont pay back what is in effect stolen hard earned cash. If they thought it was a fare and just system they set up, then why give in under pressure and offer one month back to the customer when they argue for it. I’ll tell yo why! because they need you and the only way to gt them where it hurts, is to leave them NOW! There’s other deals out there, don’t be scared. You mean nothing to them, until your gone.

LeeLee says:
17 January 2016

I know this post is old but I was wondering, if my contract of 2yrs was paid off but I’m still paying the same price am I owed or can I claim money back as I’ve already paid my phone off?

I would get out a.s.a.p. LeeLee! I don’t know which provider you’re with but it’s likely somewhere in their terms and conditions (small print) that you will continue your contract with the same payments after the 24 months are up. It’s a scam and the sooner you switch to another provider, like O2 or Giffgaff or Tesco Mobile, who separate their handset cost from airtime used, the better! Good luck! (Seeing that this post is old, you hopefully have already found a solution to this issue last year).