Mobile customers losing out on billions of pounds by being on wrong contract

New Which? research, as part of our Unlock Better Mobile Deals campaign, has revealed that mobile phone customers are collectively overpaying by billions of pounds per year by being on the wrong contract for their usage.

Our new study finds that mobile customers are losing out on £5.42bn per year, either by paying for texts, minutes and data they don’t use or paying extra charges because their phone package is too small.  Seven in 10 (72%) mobile customers could save £159 each year on average by switching to a contract that better suits their needs, with three-quarters (77%) able to save at least £50 a year.

Nearly half (42%) of people with a mobile phone contract think that there is a better value tariff out there for them however Ofcom research shows switching levels are low with half (48%) of people never having switched supplier.

With only three in 10 (28%) people trusting mobile phone services, we want mobile phone companies and Ofcom to make switching hassle free and prices transparent.

Which? executive director, Richard Lloyd, said:

“It’s shocking that consumers are overpaying by billions of pounds for mobile phone contracts that just don’t suit their needs. Mobile phone companies must do more to help people get the best deal, making switching hassle free and ensuring that pricing is transparent. If we don’t see mobile firms making voluntary improvements then we will ask the regulator Ofcom to step in.”

We want mobile phone companies to take voluntary action by:

  • Unlocking handsets automatically for free;
  • Notifying customers at least a month before the end of their contract and giving them information on the best deals for them; and
  • Showing the monthly cost of the handset separately from the service charge.

We also want Ofcom to introduce a system where the provider gaining the new business is responsible for the switch to make the process easier for consumers.

Notes to editors

1.    More than 36,000 people have signed up to our Unlock Better Mobile Deals. To support the campaign visit www.which.co.uk/unlockmobiles

2.    Analysts at Bill Monitor carried out research exclusively for Which?.

3.    Populus, on behalf of Which?, interviewed a representative sample of 2126 UK adults online between 12th and 14th December 2014.  Data were weighted to be demographically representative of all UK adults. Populus is a member of the British Polling Council and abides by its rules.  More information on the Which? Consumer Insight Tracker available at: https://consumerinsight.which.co.uk

4.    Some mobile phone companies are already simplifying the billing and switching process, for example, O2’s Refresh initiative splits the bill in two so customers can see exactly what they’re paying for, with one section showing the minutes, texts and data and a second section showing the cost of the handset. Tesco mobile, Virgin and giffgaff have similar plans too and we think all mobile phone companies should be doing this.

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