Many consumers pay more than they need to for their handset
20th April 2015 15:01 - Telecommunications
A survey by Which? has found that consumers are paying more than they need to for their mobile handset - with customers cumulatively overpaying millions of pounds every year on handsets which have already been paid off.
The survey found that 46% of mobile phone users, who, when they came to the end of their contract period, did not choose to switch straight away, which resulted in a figure of £355 million per year, being paid for handsets, which had already been paid off. This figure translates to £92 per person.
Which? also revealed that 3 in 5 (60%) of consumers believe that it was important for providers to separate the handset cost from the tariff cost on bills, in order for customers to be fully informed when switching.
When looking at which providers separated handset prices from tariff costs, O2, Tesco Mobile and Utility Warehouse have contract options which separate the two fees. On the other hand Vodafone, EE and Three do not offer a separated plan, and all charge a combined price. However, giffgaff had never combined the two costs within their tariffs.
The survey revealed that 97% of the respondents found that price was important when thinking about switching contracts.
74% of the respondents said that it was important that customers were warned when their plans approached the end of their contract period.
Richard Lloyd, Executive Director of Which? said of the findings: "Consumers are being misled and as a result are collectively paying millions of pounds each year for a phone they have paid off.
"All mobile phone operators should separate out the cost of the handset so people don't continue to pay after the contract comes to an end.
"Mobile providers need to play fair and ensure their customers are not paying over the odds."
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