Millions overcharged for mobile contracts: are you affected and can you claim compensation?

An estimated four million mobile phone users have been overcharged a total of almost half a billion pounds for handsets they already own, according to a new study.

Consumer charity Citizens Advice found that EE, Three and Vodafone “routinely continued to charge customers for handsets after they had paid them off in full”, The Times reports.

Many customers have no idea they are getting stung with unnecessary extra charges for phones after their contracts have ended, when they only need to continue paying for calls, texts and data.

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Older people are “twice as likely” to continue paying for a phone they already own, costing them an average of £264 a year, the newspaper adds.

The average consumer is unknowingly charged around £22 a month extra after completing their contract, but that rises to £38 for smartphones such as Apple’s iPhones and handsets from the Samsung Galaxy series, reports Sky News.

Citizens Advice is calling for EE, Three and Vodafone to separate the monthly cost of handsets from the network fees.

“We need action,” said the charity’s chief executive, Gillian Guy. “Other companies have already stopped doing this so we’re looking for these three major providers to follow suit.”

Who is affected?

Anyone who purchased a mobile contract through EE, Three or Vodafone may be paying for a phone that they now own, the BBC reports.

Can you claim compensation?

That depends. No one is automatically entitled to compensation, according to the BBC. Mobile users “can only make a claim if it was not made clear in their contract that the deal would continue at the same price”, the news site explains.

Charity boss Guy says consumers should “check their phone bills to see if they can save money with a Sim-only contract or upgrade to a new phone”.

What are the mobile providers saying?

Responding to the study findings, Three said: “We continue to look closely at the issue of handset financing and are working closely on this with the Government and regulators”.

Vodafone insists that it contacts “all customers approaching the end of their minimum term to let them know their options. These include upgrading or moving to a Sim-only contract.”

Meanwhile, EE says it agrees that “customers shouldn’t overpay”, but that “this is best achieved through clear communications with consumers about their options”. The proposal “for separating phones and tariff doesn’t give the customers the transparency or best deal that they deserve”, the company argues.