Mobile phone users ‘owed £3BILLION compensation’

MILLIONS of mobile phone users could be owed £3billion after years of being overcharged on their contracts, a former Citizens Advice executive has warned.

Customers could receive an average of £1,800 in compensation from Vodafone, EE, Three and O2, after a legal challenge was launched last week against the UK’s four largest mobile phone network operators.

Consumer champion and former Citizens Advice executive Justin Gutmann, who has launched the legal action, estimates that these companies have overcharged customers on up to 28.2million contracts and is seeking damages of £3.3billion. Many are expected to have claims against more than one mobile operator and so could receive even more compensation, he says.

Alongside law firm Charles Lyndon, Gutmann claims that phone providers have been ‘abusing their dominant positions in the UK mobile industry by charging a loyalty penalty’, in which longstanding customers were overcharged for handsets beyond the end of their contracts.

This applies to anyone who purchased mobile contracts made up of a mobile phone and airtime services such as data, minutes and calls. When these contracts are agreed, their price during the minimum term of the contract includes both the mobile and the use of airtime services. However, Gutmann says mobile network operators have failed to reduce the amount charged once the minimum contractual term expired, despite the fact that consumers had already paid for their mobiles. This means customers could have been charged more than a new customer if they were just paying for airtime services.

He says: ‘I’m launching this class action because I believe these four companies have systematically exploited millions of loyal customers across the UK. It’s time they were held to account.’ All qualifying consumers will be automatically included in the claim for free unless they opt out. You can find more information online at loyaltypenaltyclaim.com. An O2 spokesman said: ‘We were the first, a decade ago, to automatically and fully reduce customers’ bills once they’ve paid off their handset. We’ve long been calling for other mobile operators to stop charging customers for phones they already own.’

Vodafone said: ‘This has just been brought to our attention and we don’t yet have sufficient detail for our legal team to assess.’

An EE spokesman said: ‘We strongly disagree with this speculative claim. EE offers a range of tariffs and a robust process for dealing with end of contract notifications.’

Three has been approached for comment.