October 1, 2018

Mobile operators could be forced to automatically move out-of-contract customers to lower monthly tariffs

Telecoms regulator Ofcom has presented plans to stop mobile phone companies from continuing to charge users for their handsets after they finish paying for them.

The regulator said that it would consider several options to ensure that charges are clear and fair.

This announcement resulted from pressure by consumer groups for Ofcom to stop mobile service providers from overcharging customers.

In late September, Citizens Advice reported that about 4 million people on mobile service plans with Vodafone, Three and EE had paid an additional £490m for their phones after the end of their contracts.

One of the options that Ofcom suggested is to require mobile service providers to automatically switch their customers to less expensive SIM-only plans once they reach the end date of contracts that include a phone. The regulator estimated that providers are still billing 1.5 million customers for phones that they have already paid for and said that it is “unacceptable” for these companies not to provide more transparency to their customers.

Another proposed option is to have mobile service providers provide their customers with a clear breakdown of the amount and duration of payments for a phone prior to finalising a purchase.

After the release of the Citizens Advice report, an EE spokesperson said that the company is in favour of more transparency and better communications as a solution to the problem of overcharging for phones.

Three issued a statement saying that it would “continue to look closely” at how it handles the financing of phones and would work with Government regulators on the issue.

Vodafone said that it already notifies its customers towards the end of their financing commitments and provides them with options on how to proceed.