New research from Citizens Advice reveals the shocking truth behind the ‘loyal penalty’ that customers face for sticking to their contract.
By comparing the costs of expired mobile contracts with SIM Only deals, Citizens Advice discovered that three of the four major UK networks are overcharging loyal customers between £22 and £46 every month.
Once a phone has been paid for, EE, Vodafone and Three are still charging users over the odds with budget-busting monthly bills.
Expensive handsets like the new 256GB iPhone 8 – priced at £849 out of contract – leave customers overpaying the most amount of money.
Even handsets costing under £300 on the open market, when taken out on a contract deal, can leave customers paying monthly bills twice as expensive compared to SIM Only contracts with the same network.
Some of the largest mobile phone providers are routinely overcharging their loyal customers.
Mobile phones are now an essential part of modern life, but the way that the cost of handsets are hidden within some mobile phone contracts gives phone providers a way to exploit their customers.
It is clearly unfair that some phone providers are charging loyal customers for handsets that they have already paid for.- Gillian Guy: Chief Executive, Citizens Advice
In light of this research, Citizens Advice are now calling for mobile networks to clearly separate the cost of the handset from the cost of the contract in all customer bills and advertised prices.
If the networks do not listen to these demands, it will be down to the government and Ofcom to regulate this practice.
What’s the solution?
Until the networks, advocates and regulators sort this mess out, how do loyal customers avoid paying for these excessive loyalty charges?
The answer is simple – switch to a SIM Only contract. You don’t even need to change your network or buy a new phone.
With a SIM Only deal, you only pay for the minutes, texts and data in your contract. Many SIM Only deals also now have unlimited texts and calls included, so you’ll only pay out for the data you use.
Handset-inclusive contracts force you to continue paying for a phone that you already own – so you could be paying up to £38 a month for absolutely nothing.
These networks are making money from complacency and ignorance, so don’t get caught out. It’s difficult to see how they could care about customer loyalty or fair prices. Sadly, it is far easier for them to profit from a customer’s confusion than a customer’s satisfaction.
If you’re one of the unlucky loyal customers, head over to our guides for all the info you need to choose and switch to a SIM Only deal.