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Survey Finds UK Mobile Operators Slow to Tackle Overpayments

Friday, August 28th, 2020 (8:05 am) - Score 561
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A new survey of 4,006 UK adults, which was conducted by consumer magazine Which? in July 2020, has found that 36% of mobile customers whose bundled airtime contracts (handset and mobile tariff) have ended in the last 2 months are still overpaying on their bill. This is despite many operators pledging to tackle the practice.

Most mobile network operators will offer consumers a choice of either taking a SIM-Only plan (i.e. you just pay for the text/data/calls or mobile broadband plan of your choice) 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 makes the high cost of some devices more manageable.

Until recently the main problem with this approach was that, at the end of your contract term, many operators would keep taking the same monthly payments as before (i.e. you’ve already paid off the cost of the handset but the operator is still 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 that.

Last year Ofcom estimated that around 1.4 million UK consumers were out of their contract and still paying instalments towards a handset that has already been paid off – equating to consumers paying £182 million a year more than they should. The regulator moved to tackle this by extracting a series of commitments from Virgin Media, Tesco Mobile, O2, Vodafone and EE (here), which were introduced from February 2020.

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.”

Survey Results

As above, some 36% of mobile customers whose airtime contracts have ended in the last two months are still overpaying on their bill and that’s partly due to the differences in how operators have implemented their commitments to Ofcom.

Obviously, the worst hit were customers of Three UK, with some 43% of those whose contracts have ended in the last 6 months claiming they saw no price drop at the end of their term. The figure drops to 40% for EE and 31% for Vodafone, which is partly because those two operators chose to only reduce their prices for customers once they’ve been out contract for more than 3 months (e.g. EE only reduce prices by 10%).

Customers on O2, Tesco Mobile and Virgin Mobile are less likely to face such hefty overpayments, as these providers told customers they would see their bills reduced to the equivalent of a 30-day, or best available, airtime deal once their original term had ended.

We should point out that all mobile and broadband operators are now required to send End of Contract Notification Letters once customers reach the end of their term, which makes them aware of how much they’re currently paying and what other options are available. But many people still choose not to make any changes to their mobile plan.

NOTE: Ofcom relaxed their enforcement on end of contract notifications for several months this year due to the COVID-19 crisis, which will have affected some people.

which_reasons_for_not_changing_uk_mobile_contract

Overall, there has been good progress this year, but clearly certain mobile operators are trying harder than others to be fair with their customers. Admittedly it’s not always easy deciding which SIM plan to move airtime customers on to at the end of their term, particularly as the available plans may change over the length of such contracts, but others have shown that this is not an insurmountable obstacle.

Speaking in response to the survey, EE said that it was “entirely wrong” to suggest that they aren’t fulfilling their commitment to Ofcom’s fairness measures. The operator pointed out that, since May 2020, “we automatically give handset customers a 10% discount off their monthly bills once they have been out-of-contract for three months. We ensure customers are fully informed about their contract pricing and send reminders to encourage them to choose the right deal for them when their contract ends.”

Meanwhile Three UK said they have some of the market’s lowest prices and “always put customers first.” The operator added that “applying an arbitrary discount to tariffs will not effectively tackle what really matters – helping customers to find a contract which is both best-suited to their needs and priced fairly is what we do.”

Finally, Three said they allow their customers to “choose what they do when they reach the end of their fixed term commitment. To ensure that they can make an informed choice, we send all customers a notification before the end of their contract which shows them what they are paying for now, what an equivalent SIM only tariff is and also a SIM only tariff based on their actual usage.”

Sadly, Vodafone chose not to comment.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
Leave a Comment
8 Responses
  1. Avatar Michael V says:

    Disappointing that Three didn’t sign up to the agreement. My contract ends in October & can change plan from 7 September.
    Personally, yes, I would want them to notify me by email or txt or letter. But I wouldn’t want them to change me to a SIM only plan, equivalent to my all unlimited one I have now. This is where it comes around to the customer. This is basic essential information. Use the My 3 app to know your end date, website log in account or call services.
    My Current cost, £37.90. That’ll change to £11 for 6 months then £22. If users don’t make the effort then I don’t think we should put ALL the blame on Vodafone, O2, Three, EE.
    🙂

    1. Avatar Buggerlugz says:

      Three didn’t sign up to the agreement. How worrying.

      Then again (in my experience) they do struggle to take ownership of any of their “not so great” operating practices.

      Maybe they’d rather just have zero accountability whatsoever?

  2. Avatar Moss says:

    Some times I even make that mistake of “overpayments”, but unfortunately most of our Mobile Providers do not even bother to give our money back, they take it (of course, sarcastically).

  3. Avatar Paul says:

    People need to learn to take ownership of their bills instead of waiting for companies to do that job for them.

  4. Avatar Fabrizio says:

    I’m not surprised by the findings, I was using an app called Air Rewards and had enough points to get a credit on my Three bill, which they did. Except that although it showed on my bill as a credit, it never was actually applied to it. Contacting both Three and The App’s peeps led me to nothing. It was a tenner and I left three then for Honest Mobile as I liked their offerings so I saved myself going insane chasing that up. But, yes, Three gleefully pocketed the tenner! lol

    1. Avatar Fabrizio says:

      Forgot to mention that the end of my Three contract for Home Broadband is etched on my calendar, so that I will cancel on the dot ! 😉

  5. Avatar Fred says:

    Fabrizio, did you get to keep your three router?

  6. Avatar james says:

    I remember back in 2018 one women complained to dailymail saying three mobile charging her bank account 20 pounds a month after cancelling a contract in 2016.

    Seriously people these never heard of online banking and cash machines.

    I check my direct debits each month once my contract is finsihed I cancel the direct debit.

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