Citizens Advice to Three UK – “Stop Ripping Off” Loyal Customers

The Citizens Advice agency has this morning called Three UK out for “being the only major provider to refuse to commit to measures to stop ripping off all its loyal customer,” with the organisation claiming that the operator overcharges loyal customers by between £1.5 and £2.7 million a month.

Most mobile operators offer consumers a choice of either taking a SIM-Only plan (i.e. you just pay for the text/calls and data / mobile broadband usage via your own device) or a bundle with a mobile handset (airtime plan). The advantage of a bundle is that it enables consumers to spread the cost of their handset and mobile plan across the contract term (12-24 months), which useful given how much some of the top-end Smartphones cost (£1,000+).

Bundles like this tend to cost a lot and that becomes more of an issue if, at the end of your contract term, the operator keeps taking the same monthly payments as before (i.e. you’ve already paid off the cost of the handset but the operator is still effectively asking you to pay for it). At this point a wise consumer would switch to a SIM-Only option or change plan / operator but not everybody does.

Back in July 2019 Ofcom moved to tackle this and they proposed a number of measures to improve the situation (here), which gained support from almost all of the key players. The only major mobile operator NOT to sign-up was Three UK, which “refused to apply any discount to its out-of-contract customers” and Ofcom thus feared they would “continue to overpay and will not receive similar protections if they stay on their current deal.”

The Citizens Advice’s criticism of Three UK today is thus an echo for Ofcom’s own remarks, except they’ve added a few figures to underline the point. The charity claims – based on publicly available data from Ofcom – that between 154,000 and 210,000 Three customers are paying a “loyalty penalty” each month and on average this penalises them by £10-£13 each month.

Gillian Guy, CEO of Citizens Advice, said:

“It’s unacceptable that Three still thinks it can penalise its loyal customers by over a million pounds every month. It cannot continue to bury its head in the sand.

While Three claims in its adverts that “phones are good”, its customers may find their experience anything but, as their provider falls behind in refusing to end this practice.

We’re pleased other mobile providers have said they’re going to act, but they must now follow through on their promises and put them into effect by early next year.

All eyes will be on Three to see if it puts this right and agrees to stamp out the loyalty penalty.”

The changes proposed by Ofcom are due to be introduced in February 2020. Meanwhile Citizens Advice are keen to point out that Three UK’s current stance appears to conflict with their decision to sign-up to the regulator’s “Fairness for Customers” commitment in June 2019 (here).

By “continuing to rip off customers paying a loyalty penalty”, Citizens Advice argues they have broken this promise. The charity warns that, if this breach continues, Ofcom must make sure Three are standing by their commitment.