back to article Brits pay £490m extra for mobes they already own – Citizens Advice

Brits forked out £490m extra on their last mobile phone contract because of bundled handset charges that continued long after the device was paid for, Citizens Advice has said. The charity today slammed networks that allow customers to stay locked into higher-cost agreements. It analysed more than 700 phone tariffs from EE, …

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  1. AndyMulhearn
    Stop

    Astonishing isn't it

    That mobile companies carry on doing this with what seems to be complete impunity. Aside from O2, who separate the loan for the phone element from the services element, they all carry on taking payments for something, in some cases long after the price has been paid in full. It's more than astonishing actually, it beggars belief that they carry on getting away with this.

    Aside from the words above, speechless.

    1. Lee D Silver badge

      Re: Astonishing isn't it

      People are stupid.

      There's free money in doing it for the mobile companies.

      Anyone with a brain buys their phone outright or via a separate loan agreement (e.g. giffgaff offer completely unrelated loans on all the top brands of phones).

      I have literally met 18/19-year olds who are paying more for their phone each month than they are food. I mean, hell, sometimes even the parent's Sky package is cheaper!

      There comes a point where it's just a stupidity tax that we should let those people pay.

      1. NumptyScrub

        Re: Astonishing isn't it

        There comes a point where it's just a stupidity tax that we should let those people pay.

        If we're going down the victim blaming road, how far are you willing to travel before you change from "it's their fault they got conned" to "that's fraud and should be punished"?

        It is entirely within the bounds of technology to drop the tariff to the equivalent SIM-only price once the initial term is over, and if the customer is paying Direct Debit this can be an entirely automated process. It is also entirely possible to show both figures at time of purchase (monthly cost for the first 24 months, and monthly cost thereafter), so that consumers can make an informed choice when choosing a particular deal.

        Is it really the fault of the customer that they are being charged for a product that has already been delivered, or the fault of the provider for choosing not to implement a technical solution that would resolve the issue entirely?

        1. Timmy B Silver badge

          Re: Astonishing isn't it

          "Is it really the fault of the customer that they are being charged for a product that has already been delivered, or the fault of the provider for choosing not to implement a technical solution that would resolve the issue entirely?"

          Yes. It's the customers fault. If you are paying money for something then it is down to you to agree what to pay and how long for and for you to monitor what happens at the end of that agreement. Different if they go outside the agreement but both sides signed an agreement.

      2. AndyMulhearn

        Re: Astonishing isn't it

        People are stupid.

        There is some of that. But it depends on how the contract is sold. IIRC - I've not had a phone contract for a few years - you get a contract that covers both elements. What I suspect you don't get is a statement either way that says what happens at the end of the term.

        With these guys I'd hazard a guess that there's no "And we will carry on taking a payment for the phone even after you pass the end of the contract because we can" so it's not clear to people what happens. And to be frank, most would assume they only pay what they should because that's how most "loans" work.

        1. Lee D Silver badge

          Re: Astonishing isn't it

          Do you know how many people I know who have "bought a new car" on only to realise three years later that they didn't read the small print and now they have to pay some huge portion of the overall cost or lose the car entirely?

          If people sign up to a long agreement and then FORGET that they've done so... and then let that linger for any significant portion of time, when they were given the contract, had it all explained, have it there in writing in front of them? Yeah, I think there's an element of "learning experience" there for them.

          The exact people who get those agreements are the exact people who can't *afford* to be sloppy with money because they couldn't even afford to buy their phone outright. Though that might flag as something we should babysit for them, I really think we'd be better off just leaving them to it.

          There isn't a court in the land that would demand the mobile companies "pay back" that unnecessary extra paid as every piece of paper they have clearly lays out what they're paying, how long for and what it'll cost. That people just let that roll over, without even phoning up the company and saying "I seem to have been paying for this an awful long time now" or "I can get a better deal elsewhere", means they don't care.

          And it's for something that I consider a luxury item. Smartphones don't have to be luxury items, but the ones you need to take out finance just to purchase them? Yeah, that's a luxury item for you, I'm afraid.

          1. aks Bronze badge

            Re: Astonishing isn't it

            The problem with calling the company is that you reach a call centre who can't deal with your account.

            You need to go round in circles until it gets escalated to the relevant finance team. This may even need to be raised as a formal dispute and involve the company appointed ombudsman, who will have the power to check the facts and chase the finance team.

            When I went down this path the ombudsman judged in my favour but the finance team then produced incorrect information to cancel what the ombudsman said. Only a second session with the ombudsman resulted in me being correctly treated.

            At that point the operator decided to pay me the refund but then chose to cancel the contract with immediate effect.

            1. John Brown (no body) Silver badge

              Re: Astonishing isn't it

              "The problem with calling the company is that you reach a call centre who can't deal with your account."

              When my wifes phone was paid for, we phoned Virgin and they couldn't have been more helpful. I asked what sim only deals they ahd we could switch to and the nice lady at VM looked at the usage pattern and suggested an unlisted £5 per month deal for something like 200mins/2GB data/unlimited texts. That's more than she needs at a very nice price. She's been on that deal for about 4 years now. I think it's now £5.50pcm after prices rise(s).

      3. anothercynic Silver badge

        Re: Astonishing isn't it

        @Lee D, sorry but I absolutely disagree.

        The mobile phone companies known full well when the subsidy for the mobile phone is fulfilled and the device paid off. There is *nothing*, and I mean *nothing*, stopping them technology-wise to send a message at the end of the contract term to say "hey there, your contract term has ended, and as such your phone is paid off, so we're dropping the subsidy element of your monthly fee from next month."

        If they can do it for things like Spotify/NowTV/Sky Sports (with Vodafone) or other 'goodies' that are part of your bundle, they can do this for the phone too. But, there are some providers who effectively use the subsidy as a 'lease', so you get free upgrades whenever you become eligible, whether you want/need them or not.

        I *do* agree with you though that "let's force the mobile companies to pay everyone back" is stupid. Force them to change their procedures, sure, but forcing them to refund? Nah.

    2. Mongrel

      Re: Astonishing isn't it

      Tesco Mobile also do this, the prices on the website are basically "Pick your phone and how long you want the contract to be then add a data\calls package".

      On a side note it's also nice that I've never had the desperate slew of upgrade calls every year from them or attempts to up sell my paltry SIM deal.

    3. aks Bronze badge

      Re: Astonishing isn't it

      I'm surprised that somebody hasn't taken the operator to court for charging for a service that's not being delivered.

      There must be some clever weasel-words in the contract.

      1. Anonymous Coward
        Anonymous Coward

        Re: Astonishing isn't it

        >I'm surprised that somebody hasn't taken the operator to court for charging for a service that's not being delivered.

        We had to do this with Vermin Media Business - they were charging us (two years after the fact) for lines that we had cancelled - despite acknowledging the cancellation and *actually* cancelling the line.

        Their excuse? "Well - you didn't tell us to stop charging you".

        After months ot arguement, we decided to take them to court. Amazingly, we got the refund pretty swiftly after that..

        1. Lee D Silver badge

          Re: Astonishing isn't it

          Charging for a promised service that isn't delivered is an entirely different thing.

          The contracts will be clearly written, however, to say "you will pay X per month until Y when you will pay Z per month". And "After N months, you will own the phone".

          NOWHERE will it say that you're still paying for the phone with the surplus after those months. You're not. You're paying for a contract which contains items which include, to whit, the provision of one telephone over the life of the contract. That you then continue to pay it unnecessarily for years afterwards is completely different to, say, VM charging you for a line you don't even have.

    4. Boo Radley

      Re: Astonishing isn't it

      In other news, millions in the US are paying every month for landlines telephone sets that they trashed long ago. The last figure, some years ago, was 30 million people.

  2. druck
    Happy

    O2 dont

    In case you didn't spot the missing operator from the list, O2 don't do this, and automatically transfer you to a cheaper SIM only contract if you don't upgrade your phone - or at least thats what happened 2 years ago when my contract ended.

    1. Captain Scarlet Silver badge
      Coffee/keyboard

      Re: O2 dont

      Thats not right, when I had my Blackberry Q10 with O2 they had already seperated the plans.

      Two seperate payments each month, when the phone was paid the second payment stopped as the phone was paid for. I didn't think O2 still did the more "traditional" plans?

    2. d3vy Silver badge

      Re: O2 dont

      O2 go to the length of having separate direct debits for the handset and the tarrif.. so when your handset loan finishes they just stop collecting it.

      They also show you the outstanding balance in the myO2 app and allow you to pay off early if you want too.

      It's rare I say this but I really can't fault O2, I've been with a few providers and they're by far the best.

      1. Terry 6 Silver badge

        Re: O2 dont

        Tesco and others use the ) O2 network and you get the same from them too. When I had my windows phone (sadly missed) the cost went down to about £3/month on expiry of contract period.

  3. Steve Davies 3 Silver badge

    Can someone please remind of the upsides of a mobile contract...

    as opposed to buying a phone outright (or from someone other than the Phone Company or PC-World) and getting a SIM only deal from the network of your choice?

    What? is that Tumblweed blowing in the wind from Storm Ali?

    Once upon a time there was a need for mobile contracts that included the device. These days? not really.

    1. ARGO

      Re: Can someone please remind of the upsides of a mobile contract...

      That the device won't have all features enabled for your chosen network unless you buy it from that network. And networks are not keen to sell a device without a contract. VoLTE is a current example - get a custom device from your network and everything is shiny, bring in one from elsewhere and that service won't work.

      The device vendors are working on network id based auto-config to fix this, but don't hold your breath for UK network settings in anything that isn't widely sold in the UK.

      (That said, Apple have had this capability for years and do it through an online database lookup rather than stored in the device. So their models work properly everywhere.)

    2. shifty_powers

      Re: Can someone please remind of the upsides of a mobile contract...

      Because not everyone can afford the insane cost of even mid-range phones and the ability to amortise the cost across the contract length can be very useful?

      And the 'you don't need an all-singing, all-dancing smart phone' argument is a red herring. YOU may not, other people will. And on such a subjective point, the only person who gets to determine the validity of what they need is the individual involved.

      1. NXM

        Re: Can someone please remind of the upsides of a mobile contract...

        The bundle is part of the reason for the insane cost of the phone. People aren't going to fork out a grand for the latest iThing when they can gat an 'affordable' monthly payment instead. This allows the manufacturers, with their accomplices the network operators, to hike the price. Win win!

      2. Anonymous Coward
        Anonymous Coward

        Re: Can someone please remind of the upsides of a mobile contract...

        Not buying a Contract means that you can have the phone that you want not what the networks decide to offer.

        Also if you are on Android and decide that you want to use an alternative build you can as the phone is yours.

        If as we always hear, Android is about choice then buying the phone of your choice and using the OA of your choice on the network of your choice is what it is all about isn't it?

    3. CrazyOldCatMan Silver badge

      Re: Can someone please remind of the upsides of a mobile contract...

      as opposed to buying a phone outright

      Lower initial outlet. There are quite a few people that want the latest SHINY SHINY but don't have the £800-£1500 at hand to buy it outright[1].

      So they go for a HP-type deal.

      [1] Of course, there is an arguement that they should save for such purchases but that's not going to happen either..

  4. Hans 1 Silver badge
    Windows

    Have them ask for a refund ?

    1. VinceH Silver badge

      "Have them ask for a refund ?"

      The deadline for claiming back PPI is getting nearer - so there does need to be a new thing people can claim back in order for the PPI claim companies to stay in business.

  5. SkippyBing Silver badge

    How?

    How do people not know they're contract is coming to end? Whenever I've got close to it I'm inundated with phone calls and texts asking if I want to upgrade, which reminds me to go onto a sim only tariff on those occasions I've gone down the bundled route to get a phone*.

    *It oddly worked out cheaper one time.

    1. Terry 6 Silver badge

      Re: How? Because the phone is free innit????!!!

      People, in a vague, unconsidered way think that they are just paying for the network, and get a "free" phone. And the marketing has allowed them to think this by the way it's worded. You get a such and such choice of phone if you take this such and such contract. Also the nature of that never ending payment reinforces this*, the contract is for £xx a month including phone. Never until phone is bought.

      *O2 and associates (Tesco etc) aside

  6. Aaiieeee

    Yes, but

    On some level you have to take personal responsibility such that if your money is important you will do your best to ensure it is well allocated. This includes checking in on your expenses and what you expected to pay for an item. Yes it can be boring but it is the money you spent a lifetime earning, take an interest!

    My Nokia 3 cost £110 outright and monthly costs is £7.50. This is not particularly difficult to work with. I have no interest in phones and hunting for a phone wasn't fun, but I understand my arrangement and am happy with it.

    On the other hand it seems entirely reasonable that after something has been paid off the payments for the item should stop without question or prompting.

    Since companies are not looking out for my best interests I automatically assume I have to do everything myself, but I guess most people don't have this attitude.

    1. Anonymous Coward
      Anonymous Coward

      Re: Yes, but

      I tend to agree but I wouldn't be happy if my mortgage company continued to take payments after I'd paid off the mortgage.... should that ever happen!

      1. Gavin Chester

        Hmmm

        To be honest you may not be happy but unless you make sure you cancel the DD to them Mortgage company they will still try and take it.

        Not its not personal experience, but one of a friend who trusted the Mortgage company to stop once they took the final payment without checking.

  7. Mr Gullible

    A tech company with Ethics?

    Well, you could have knocked me down with a feather.

    Well done O2! (who's broadband service was also excellent before they sold it).

  8. Oddlegs

    I'm struggling to have sympathy for people who sign up to an £x per month contract for 24 months which includes a 'free' phone and don't think to check after those 24 months are up whether they're still on a good deal.

    Mortgages, broadband, television, utility bills and just about every type of recurring payment has some provision for what happens when you complete your fixed term and not a single one of them puts the price down automatically at the end of it despite you having paid off the cost of your Sky box or router. The costs of being moved onto your mortgage provider's SVR after your fixed term end will dwarf any mobile bill.

    Not all mobile contracts are necessarilly bad deals. My other half recently got a Galaxy S8 on a 24 month contract at a total cost of ownership of only about £100 more than buying the phone alone. It's not exactly a chore to stick a reminder in the calendar to change contracts after 2 years.

    1. Anonymous Coward
      Anonymous Coward

      Mortgages, broadband, television, utility bills and just about every type of recurring payment has some provision for what happens when you complete your fixed term and not a single one of them puts the price down automatically at the end of it despite you having paid off the cost of your Sky box or router.

      In half of those cases there's no customer equipment to take account of, and the majority of the remainder its chickenfeed (like a fifteen quid router). Now consider that the majority of these deals have a big discount on the contract for new customers, and you'd realistically expect the cost to go up.

      For PVR there's more at stake, I'll grant you, but the case of mobile phones is totally different. The network operators are going out of their way to disguise the handset hire-purchase element.

      1. Oddlegs

        consider that the majority of these deals have a big discount on the contract for new customers, and you'd realistically expect the cost to go up

        So they offer an initial discount in the hope of making up any deficit once the discount expires. How is that different to mobile networks? Just swap the word 'discount' for 'handset subsidy'. If anything the mobile networks are more honest about it: at least they keep the price at the same agreed level.

  9. beerandbiscuits

    Let them pay

    I'm fed up with this attitude that people who can't be bothered to look after their own money should have it looked after by regulations instead. The companies concerned rely on making money out of the idiots so that those of us who care about how much we pay can pay less.

    I've been split ticketing advance fares on the railway for years, but now because some people can't be bothered the best deals are disappearing in favour of fares being "fair" for those who are just plain lazy. I change power and gas supplier regularly to the best deals, but now that is going the same way as the government says that people should automatically get better deals when they can't be arsed to do it themselves.

    If people are too thick to realise they could be paying less, that's their problem - leave them to it.

    1. Terry 6 Silver badge

      Re: Let them pay

      I can understand why you would think that. But in the real world a large part of the population are no match for the misdirection and deviousness of large companies. Companies who pay lots of money to help them separate the public from theirs. Like complex tariffs that a harassed parent isn't going to have the time to work through even if they have the skills to work through.

      Simple example. Yesterday I took a repair plan warranty extension on a new dishwasher The manufacturer's warranty comes with an extra year free, though it is a limited warranty. There's another option of a 5 year extension, or a third option, to get a full cover annual policy, not directly from the manufacturer, using teh same agent as it happens which would cover the aspects that are uncovered by the warranty ( user negligence, that sort of thing) which costs a bit more than the 5 year policy over 5 years- because you have to pay the full amount even during the 2 year "free" cover option, and that sounds like a raw deal except the cost remains constant for the length of the policy so that it works our much cheaper once you get past a certain number of years.

      Now, how many are going to be able to work through that lot? And how many would take the manufacturer's offer which could then get very expensive from year 6 onwards.

      1. SkippyBing Silver badge

        Re: Let them pay

        a) If they don't charge the stupid people more, the clever people can't pay less.

        b) Who buys a manufacturer's warranty? The amount I've saved by not doing that more than covers the cost of replacing a dishwasher in the unlikely event I have to. Same goes for phone insurance.

        1. aks Bronze badge

          Re: Let them pay

          You're confusing manufacturer's warranty with third-party extended warranty via the shop.

          I've never paid for extra insurance but I know people who do and have successfully claimed on it during the period. I also know of people who *accidentally* find the device has stopped working when it's approaching the end of the warrenty or extended warrenty period.

          It depends on your attitude to insurance and how hard you are on your equipment.

          1. Terry 6 Silver badge

            Re: Let them pay

            Well I'm not confusing them. I'm fully aware of the difference. I thought that was apparent. But I understand that a dishwasher is a device that can suffer issues not covered by manufacturer's warranty, such as a small solid item lodging in the filter. The calculation was more that the slightly higher cost of an unlimited life extended warranty compared to extending the manufacturer's warranty to five years full cover would be better value than than buying a similar policy in 5 years time when the 5 year policy ran expired..Even allowing for the fact that the insurers get an easier couple of years.

            But the point was that even in that relatively "simple example" there's enough complexity buried in competing schemes to hamper an ordinary user making the best choice.

        2. Terry 6 Silver badge

          Re: Let them pay

          SkippyBing I do not believe you.

          The amount I've saved by not doing that more than covers the cost of replacing a dishwasher i..

          Cost of machine £550

          Cost of repair contract £36p/a (Or manufacturers 5 year extended £30 p/a)

          Cost of call out for repair £50 to £100 say, plus parts. ( My washer manufacturer it's £135 minimum - bloke down the road will do it for around £50).

          On those figures it would take 15 years for the cost of the warranty to exceed the cost of the machine if no repairs are needed. Just one repair of say £120 inc parts would extend that period to over 18 years.

          This is El Reg. We should all be able to do the maths.

          1. d3vy Silver badge

            Re: Let them pay

            Yeah... But another way to look at it is a £550 dishwasher is very likley to last more than five years without much more than a good clean of the filter every now and then (ours is approaching it's 8th year with no issues)

            In fact I can't remember the last time we had any white goods fail (other than the abused washing machine as my partner insists on washing colours seperatly... As in light blue load, dark blue load, white load etc..)

            So what you've done is decided that mitigating the very small risk of failure is worth £30 a year.. over five years. Do you have similar policies for all of your white goods... Because that could get quite expensive.

          2. SkippyBing Silver badge

            Re: Let them pay

            'SkippyBing I do not believe you.'

            Simple, I have never paid insurance for any white goods.

            I have never had to have any white goods replaced, or repaired in the eight years I've lived in my house*.

            Not having paid insurance of £30 p/a on each of a fridge/freezer, washing machine, and dishwasher over the eight years I've had them is £30 p/a x 3 x 8, or £720. Which would happily let me buy a new £200 dishwasher and have change. Hell even not paying £30 p/a on the dishwasher would now let me buy one of equivalent value.

            We should all be able to do maths, but apparently not all of us can do a decent risk analysis.

            *Unless you count me replacing a plastic button on the washing machine myself, total cost £15 and half an hour of my time. So hardly worth the £240 I would have paid in insurance by that point.

            1. CrazyOldCatMan Silver badge

              Re: Let them pay

              I have never had to have any white goods replaced, or repaired in the eight years I've lived in my house

              Ditto for the 21 years at our current house. We did have to replace the fridge and freezer when we moved in (new fitted kitchen didn't have space for the single fridge/freezer unit we had so had to get separates. We bought cheapo Beko units and they still work, 21 years later..

              The cooker unit did go bang though - literally. The cooking element self-disassembled in a fairly dramatic fashion whcih meant a replacement. But I exclude that one since it was a black cooker, replaced by another black cooker :-)

            2. Terry 6 Silver badge

              Re: Let them pay

              Sorry, but that's a bit like ( though in a minor way) people who say they've smoked 300 ciggies a day for 80 years and never had a cough.

              Over the years we've had numerous call outs for various clogged outlets on dishwashers, blocked filters ( and coins lodged in them), broken handles, circuit boards that have mysteriously loosened, internal pipes that have come loose and flooded the kitchen and so on. This seems consistent with the friends and neighbours. I sincerely hope your good run of luck continues.

              1. d3vy Silver badge

                Re: Let them pay

                Seriously? Blocked outlets and filters requires a call out?

                I guess that answers the question "who buys extended warranties?" The people who can't figure out the most basic of domestic jobs.

                As for your flooded kitchen story.. would an extended warranty cover the replacement of all of the damaged floor and units or would that be a home insurance claim anyway?

                A bit of simple maths to work out the mean time between failure and the average cost of failure is enough to rule out extended warranties for me.

      2. aks Bronze badge

        Re: Let them pay

        Your dishwasher seller is using deliberate obfuscation by leaving you to think they are selling you 5 year support instead of the 3 you're actually receiving.

        1. Terry 6 Silver badge

          Re: Let them pay

          That is was what I was saying. It was explicitly an example .

    2. Anonymous Coward
      Anonymous Coward

      Re: Let them pay

      > I'm fed up with this attitude that people who can't be bothered to look after their own money should have it looked after by regulations instead.

      So next time you're down the pub, or on the tube, and someone pickpockets your wallet, I'm sure you'll loudly declare "Well, bless me for being so stupid as to not look after my own goods and property. That'll teach me and fair dos to the scallywag responsible. I for one won't be taking advantage of that unnecessary legislation that allows criminals to be locked up."

      1. Anonymous Coward
        Anonymous Coward

        Re: Let them pay

        So next time you're down the pub, or on the tube, and someone pickpockets your wallet, I'm sure you'll loudly declare "Well, bless me for being so stupid as to not look after my own goods and property.

        I've seen some shite arguments in my time, but that totally, utterly irrelevant "example" is the worst I can recall seeing. No wonder you posted AC.

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