Watchdog claims that shoppers are often paying more than double what they should for mobile phone contracts in the UK
British consumers are more than often paying over the odds for their mobile phone contract, one of the country’s leading watchdogs has warned.
Research by Citizens Advice found that mobile phone firms including Vodafone, EE, O2, Three and Carphone Warehouse are selling customers contracts which cost on average 130 per cent more than they need to.
Overall, the average monthly tariffs recommended by phone staff cost £23.16 – more than double the price of the most suitable tariff found by the Citizens Advice research, which came in at £9.89.
Citizens Advice carried out its research through a series of mystery shopper tests, which dispatched researchers to all of the UK’s leading mobile phone providers and online to major price comparison sites, and discovering major variations on contracts being offered to customers.
The tests, which saw the researchers posing as pay-as-you-go customers looking to upgrade to a contract-based deal that met ‘average’ needs – around 250 minutes of calls, 250 texts and 200 megabytes of data a month, with the price of the handset included.
However, it found that staff often focused more on the importance of having a prestigious brand than getting the customer the best deal.
This included 40 percent being recommended tariffs with 1000 or more inclusive minutes of calls – at least four times more than was needed by the customer.
The monthly tariffs recommended by staff at EE stores ranged from £10 to an astounding £50.82 in one location, with Vodafone also showing a huge gap of between £9.99 and £49.99.
Staff in one O2 store recommended a tariff costing £46, but another store offered one costing just £11.35, whilst at Three, tariffs ranged from £10 to £40, showing the major discrepancy in value.
Citizens Advice is now recommending that phone retailers and price comparison websites should give customers the option to search for deals based on their personal usage rather than focusing on handset preference.
It also says that Ofcom should take a key role in helping consumers understand their consumption and find tariffs that fit their needs through the development and promotion of new tools.
“Mobile phone customers are being saddled with unnecessarily expensive contracts,” said Gillian Guy, chief executive of Citizens Advice.
“While we didn’t find evidence of mis-selling, sales pitches were focussed overwhelmingly on phone brands which meant not enough attention was paid to tariffs – which are very important.
“The focus on handset brands mean people are essentially taking out loans on expensive phones – but without being able to work out the details of the loan or whether it’s value for money.
“Mobile phones have become an essential product for the majority of people and with many contracts now lasting for years it’s crucial more is done to help consumers get the best deal for them.”
This is not the first warning call to British shoppers concerning their costs, after a report from industry watchdog Which? last year found that customers in the UK are losing out on £5.42bn per year, primarily by incurring extra charges caused by using data, texts or minutes outside of their price plan.
Overall, seven in 10 (72 percent) mobile customers could save £159 each year on average by switching to a contract that better suits their needs, according to supporting Ofcom figures, with three-quarters (77 percent) able to save at least £50 a year.
What do you remember about the best smartphones of 2015? Try our quiz!