If you purchase a phone on contract, especially if it's new and high-end, you're obviously going to be paying a lot of money every month for the next two years. Now, though, it's been revealed that some customers are still paying the same extortionate amount of money after their two years are up, because the networks haven't told them their contract period has ended.
Fingers are being pointed at Vodafone, EE, and Three, with Citizens Advice claiming that users pay an average of £22 more every month because they're unaware the contract is over. The government has now said networks need to inform customers they've paid off the phone, though networks insist their billing systems are fairly operated.
Of course they do. I can imagine not informing people they can go elsewhere is a nice little earner for them. Particularly since the research found 36 per cent of people didn't change their contract at the end of the initial 24 months.
When speaking to the BBC EE claimed that "Separating phone and tariff doesn't always represent the best deal for consumers, it can sometimes result in them paying more." I'm not sure how that logic works, but then again EE has a reputation for being horrendously expensive. Still, they're not so expensive that taking a SIM-only tariff is going to cost more than one including the iPhone 8.
Three told the BBC that it makes the end date very clear when customers take out the contract (assuming people can remember a small piece of information after two years), while Vodafone claimed to contact customers towards the end of their contracts to discuss new options - including upgrading their handset.
Surprisingly O2 isn't mentioned, which implies they're more forthcoming with customers about paying off their phones. I mean they didn't inform me when my contract was up a few years back, but that was a 12 month SIM-only deal and I wasn't actually being overcharged as a result.
Gillian Guy, chief executive of Citizens Advice, has criticised the practice of hiding handset costs within a contract, and then the fact networks seeming to charge" loyal customers" for handsets that have already been paid off. She was especially critical of the fact this affected older customers more than others, with 23 per cent being charged too much after their initial contract period was over.
Not only has Guy called for networks to alter their prices once the handset has been paid off, she wants networks to offer a full breakdown of what people are paying for when they sign up. That way they can see how much they're paying for the phone and the allowances, which should let people better compare deals. [BBC News]