Are there charges you don’t recognise on your mobile bill?

Charities take advantage of this facility too, but I still agree with you: it should be banned. There are alternative payment methods. It’s a form of inertia selling.

So, NFH, did you respond to the recent “Call for Inputs” published by PSA?

Wavechange, I made the opposite move two years ago – from pay-monthly to PAYG. I am now on Three, paying 1p per megabyte and very occasionally 3p/min and 2p/SMS. In London, there’s wifi almost everywhere I go, so Three’s 1p/min data fills in the small gaps.

I’m totally against monthly bundles of minutes, texts and data. Imagine if we had to buy electricity and gas in this way – either guess how much you will consume in a month which wastes any units that you don’t use by the end of the month, or otherwise be stung with a unit price that is many times the usual price. For example, let’s assume that electricity costs around 10p to 25p per kWh, depending on supplier. Instead of charging you simply 12p/kWh, your supplier requires you to buy a monthly bundle of 500kWh for £60 or otherwise you pay an inflated price of £1/kWh for incremental usage. If you don’t use up the full 500kWh, you lose the unused units and if you use more than 500kWh, then you pay £1/kWh. Neither Ofgem nor consumers would tolerate this with energy, so why do Ofcom and consumers tolerate it with mobile phone services?

The only purpose of monthly allowances and bundles is to charge the consumer in full for usage that isn’t fully consumed and to charge prohibitively high rates for any usage over or outside the monthly allowance or bundle. This practice favours the mobile networks without giving any advantages to consumers. I’m not suggesting that consumers shouldn’t be able to bulk-buy their future consumption, but it is unreasonable to impose a monthly expiry on that purchased consumption. The consumer has paid for the consumption in full and should be able to use it in full or otherwise receive a refund of any unused consumption. It would be much simpler and fairer to charge for mobile phone service in the same incremental way as energy – just simple incremental usage prices at competitive prices, similar to Three’s 3-2-1 prices. Of course, mobile networks could offer volume discounts as well as period-based usage (e.g. a fixed fee for unlimited usage in a particular period), but it is an unfair commercial practice to charge consumers for usage that isn’t actually used. It is worth mentioning that the mobile networks offer simple usage-based postpaid tariffs to large corporate customers. That’s because large corporate customers don’t tolerate the ridiculous system of having to guess in advance how much each user will consume. Why can’t all consumers benefit from simple and fair incremental tariffs?

I agree, NFH. I cannot recall Which? ever expressing an opinion on this but I think it should support it.

On the contrary. I prefer paying a fixed fee per month for unlimited calls and texts.

By avoiding making any calls to, or sending texts to, premium rate numbers my bill is always the same amount. No nasty surprises.

Ian, as I wrote above, “Of course, mobile networks could offer volume discounts as well as period-based usage (e.g. a fixed fee for unlimited usage in a particular period)“. But how is it fair to charge consumers for an amount of usage and then if they don’t use that precise amount, still charge them for the full amount? A charge should limited by usage or limited by time, but not limited by both. If a consumer has paid for one gigabyte, then they should be able to use all of that gigabyte without any unreasonable time restriction; maybe one year would be reasonable. Otherwise it’s like buying a packet of sugar, which self-destructs after one month if you don’t use it all.

Most folk who have home broadband like to pay a fixed fee for unlimited data each month.

Many mobile packages now offer similar choices, either on PAYG or via contracts.

For example, and noting that other suppliers are available, giffgaff’s monthly bundles offer unlimited calls and texts for £10 a month and fairly generous data packages. £10 a month gives a data allowance of 3GB/month. 20GB a month is available for £20/month and “always on” internet for £25/month.

If I could get fast enough mobile broadband, I’d be happy to go for 20GB/month and ditch my landline all together.

Derek, why should consumers have to buy bundles or packages? Why shouldn’t they be able to pay for only what they use? If you wouldn’t tolerate use-it-or-lose-it bundles with energy, then why do you tolerate them with mobile phone services? I have yet to hear an argument for the difference in price structure between these two utilities.

NFH, I think consumers should not be forced to buy bundles if they don’t want to.

But, on the other hand, if consumers want to limit the cost of their calls and data mobile phones to no more than, say, £10/month, then buying an appropriate PAYG bundle is a good way of doing that.

I get that £10/month might be a lot of money for folk on low incomes and if, for whatever reasons, they only use a very low volume of calls and data, then just buying perpetutal credit could work out cheaper.

Derek, it’s a myth that buying a £10 monthly package limits the cost of consumption to £10/month. Most networks (possibly except EE on PAYG) will charge extortionate out-of-bundle prices, which will result in spending much more than £10.

The only effect of a £10 monthly package is that the consumer pays for £10 of usage, even if they use only £5 of usage. It means that you always pay for more than you use. It’s not about limits at all.

I would like to have the choice between a fixed fee for a bundle or a unit tariff. I would personally prefer the latter but appreciate that does not suit everyone.

NFH, I agree there can be out-of-bundle charges, but, for example, with giffgaff PAYG, if you only put on a £10 bundle each month, and you never put on any “normal credit” you can indeed limit your expenditure to £10 a month.

Granted, you won’t be able to use any out-of-bundle services, but limiting expenditure that way is a definite reality and certainly not a myth.

Contract holders are not so well served, unless they are with someone like Tesco Mobile, in which case they can set a monthly cap on their contracts.

Derek, you make a good point about giffgaff. If you have no airtime credit, then it really does limit you to the usage allowed by your monthly goodybag. Of course this results in various problems such as giffgaff customers complaining in giffgaff’s forums that they can’t phone 101, which costs 15p per call from all networks. Of course they can instead dial the police’s geographic number instead and use their goodybag minutes, but most don’t know this and some end up dialling 999 instead.

NFH, as I suggested, there will be occasional needs for out of bundle calls.

I wasn’t aware of issues with calls to the police, but DHSS 0845 numbers certainly used to be a problem.

Overall, if you can absolutely assure that you can afford something like £10 a month, a capped Tesco Mobile contract probably beats being on PAYG with giffgaff, but PAYG allows for flexibility for when you’re really skint.

Derek, almost no organisation is allowed to operate on 084 and 087 numbers any more, thanks to a self-imposed ban by the government and for businesses thanks to Article 21 of Directive 2011/83/EU on Consumer Rights, enacted in the UK under Regulation 41 of the Consumer Contracts (Information, Cancellation and Additional Payments) Regulations 2013. But I agree that this was indeed once a problem on giffgaff.

Typo: Payments -> Charges