The great mobile phone rip-off: Millions still being billed for handsets they have already bought – Telegraph.co.uk

One in three customers on ‘handset-inclusive’ mobile phone contracts continue to pay beyond the minimum term of their contract, research by Citizens Advice found. 

However, while some providers will automatically reduce the cost of the monthly fee after the handset has effectively been paid off, others do not.

On average, those customers pay an unnecessary £22 a month which rises to £38 extra for smartphones. One in five customers only realise after six months, by which time they will be £228 worse off.

At present there are no rules forcing providers to lower monthly fees to “sim only” rates which reflect the fact that the original phone has been paid for.

But in a sign that a major crackdown to end the practice could come next year, telecoms regulator 

An Ofcom spokesman said: “We share Citizens Advice’s concern that some mobile customers who purchase a handset bundled with their service plan continue to pay the full monthly charge after their minimum contract term ends.

“We’re already considering this issue as part of a wider project to help people shop around and secure the right deals, and expect to announce any next steps in spring next year.”

Citizens Advice said the networks were overcharging loyal customers by an average £22 a month. 

Those with hi-tech handsets like the iPhone 7, the Galaxy S8 or Xperia XZ Premium are paying up to £38 a month after their contracts have ended. Those with the iPhone8 256 GB model could be paying up to £46 a month extra. 

For example someone with a 24-month Vodafone contract on an iPhone 8 would pay £30 upfront towards the phone, and then £54 a month – valuing the phone at £726. 

By remaining on the contract after it ends, the customer should see their bill drop to £25 a month – roughly the cost of an equivalent “sim-only” contract.

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