I wonder how the mobile network companies have got round the legislation on consumer credit on what is, effectively, a hire purchase agreement.
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, …
The mobile phone industry pretty much from the beginning (of consumer phones at least) bundled in the phone with the contract, its only in the last generation of phones or so that most people haven't been desperate to replace the handset with something better^w^w^w^w shiny? Why is that? Could it be because mobile phone handsets are now a mature product - able to do what most people need and want them to do? In the last decade mobile phone operators have started to offer SIM only deals, where as the trend in most other industries is to try and run product as a service:
We don't buy cars any more - we lease them
We don't buy a bike - we rent them by the hour
We don't buy music any more - spotyify and friends
We don't buy software any more - we rent it as a service
We don't buy servers any more - we rent space in the cloud
Sure CAB are right to point out that purchasing a phone and airtime separately can be more cost effective, but if people are too damn lazey to work out the costs for themselves...
One last thought though, if we could all work out the true Total Cost Of <foo> and put a real value on non-tangibles would we be outsourcing everything?
We don't buy music any more
Au contraire - I buy a fair amount (on CD) from a fine online Prog music store..
(progrock.co.uk - I'm not affiliated with them but I do know the owner.. And more prople listening to Prog is a Good Thing(TM))
Buy a SIM free phone and a SIM only contract or PAYG. In return you get
- A phone that works on any network and does not need to be unlocked.
- A phone that doesn't have a bunch of network specific crapware / restrictions baked into it.
- A bill that doesn't cost any more over all than the locked in-version with the benefit that you don't have to alter it when the contract term completes.
- Gives you more choice of contract terms, plans and network operators
Of course the easiest option to stop consumers being ripped off is if the government were to simply ban phone bundling - require the phone and the contract to be separate purchases. Failing that, to force operators to drop the plan to the equivalent SIM only contract once the phone is paid for.
I agree that a single notification is pathetically insufficient. The companies should be required to convey the account automatically, with the possible exception of allowing the option to bank the extra payments instead. (For use either to shorten the next phone contract period, reduce the payment amount, or upgrade the next phone to a better model. Basically, act as a down payment.) I personally would consider it a foolish waste of money, but I certainly can't speak towards everybody's situation. It would at least stop the money from being outright stolen by the phone companies.
They had unadvertised BYOD plans, but they pushed the "free" phone. The CRTC cut max contracts to 2 years, required free phone unlocking, and split the phone payment from the service. You pay a "tab" each month for 2 years to pay for the phone, Once the 2 years is over the extra charge is gone.
Happened as described by the article with a mobile on a network starting with a V. Guess which business will never see a penny of my money ever again, no matter how many services they offer. You can fool some of the people all of the time; all of the people some of the time....................
Next phone was bought for cash and a different service provider too. As for hearing from them when the contract was coming to an end? Forget that. Not a squeak. No sensible answers to letters either.
If only service was up to the same high standard as the contracts are written to.
EE actually don't allow you to downgrade your plan once the original contract is up. You can upgrade to a contract that costs the same, but if you don't want the upgrade and just want to switch to sim only they actually refuse to do it. The only solution is to cancel your contract and take out a new one.
There's a reason all but one phone in the house is on O2, now I just need to persuade the wife that she really doesn't need to be on EE for her phone contract when it comes up again for renewal. Absolutely no idea why she has it in her head that EE is better. It's not as if she gets the cinema tickets anymore (and really, it wasn't worth it then for 2 trips a year).
They do allow it, I have done it 3 times now, no issues at all. That said, their pricing is very high. I like EE as it seems to work everywhere for me. Is O2 any good? EE allows me to never go over, something Vodafone seem unable to do. Honestly, mobile telecom providers need a good kick.
The three big telecoms (Bell, Rogers, Telus) all have the monthly cost of the phone hidden in their monthly plan, but we do have options. There are subsidiary companies (Koodo for Telus, Fido for Rogers) that do it, what I condider, the right way.
Example: I am with Koodo and my bill clearly shows my plan fee and the amount of the phone cost sitting on my "tab". Each month I get charged $15 towards the tab and see the updated balance owing. The tabs are all set to have the phone paid off in 24 months. When that happens the tab charge just goes away.
From an accounting perspective it would seem that breaking out the charges would be better for allocating revenue. The purpose of bundling them together seems to be to trick people into paying more than they should.
The carriers are taking advantage of the same human inertia that means people stay with banks and insurance companies, even though newcomers are getting better deals. So you can make the same argument that these businesses should also automatically offer a better deal; or you can make the argument that if people are too lazy or cant be bothered, the higher rate is the price they pay for avoiding the hassle of changing. Or call it a "stupid tax". Whatever.
What makes me vomit in my mouth is that the same companies who do this - presumably to a substantial block of customers who are vulnerable/can least afford it - also love to flog their social responsibility credentials every chance they get.
It's all very well making a song and dance about this but....the mobile operators are private companies whose main consideration is to make money and profits. Therefore if people are educated more about these contracts and then switch as soon as they can, the companies' profits will reduce and they'll find other ways to claw that back, i.e. raising SIM only prices, increasing costs of calls etc. Competition and market-forces don't work to keep prices down when they all decide to do the same thing. Like the energy companies and TV providers...switching all the time, forcing them to indicate when there are better offers, automatically putting customers on the lowest tariffs etc, it's all just a distraction. In many years of this envrionment, prices and bills should now be rock bottom due to all this switching and regulation, but it hasn't happened has it?
When I complained to O2 that they hadn't changed me automatically to the lower sim only price at the end of the contract term as their CEO had been boasting about on TV, they claimed that as it had been bought through Carphone Warehouse they couldn't as CPW wouldn't give them me contact details!!! What utter crap, as they have my billing details and they run my phone number!!!
After much fighting I managed to get "some" compensation, not the total overpayment!
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