Mobile firms face £3bn claim for overcharging

Millions of UK consumers could receive payouts after a legal claim was launched against mobile phone networks.

Consumer champion Justin Gutmann alleges Vodafone, EE, Three and O2 overcharged customers for phones beyond the end of their contract. 

He is seeking damages of more than £3bn on behalf of 4.8 million people.

Responding, EE called the claim “speculative”, while O2 said it hadn’t been contacted.

Vodafone said it didn’t have sufficient detail for its legal team to assess, and Three declined to comment.

The “Loyalty Penalty Claim” – which is being filed with the Competition Appeal Tribunal – is being brought on behalf of consumers who bought contracts made up of a mobile phone and services like data, call minutes, and texts.

Mr Gutmann, a former executive at Citizens Advice, estimates that 28.2 million UK mobile phone contracts could be affected from 2007.

If the claim is successful, someone who had contracts with just one of the mobile operators could get more than £1,800, he estimated.

Mr Gutmann said when the contracts were initially agreed, the cost of repayment during the minimum term of the contract – which is typically 24 months – included both the cost of the mobile and the use of services.

He alleged that the UK’s four biggest network operators and their parent companies did not reduce the amount they charged customers once their minimum contract term ended – despite the fact that consumers had already paid for their mobile handsets.

This meant existing customers were charged for something they had already paid for, and that they were charged more than a new customer on, for example, a Sim-only deal, he added.

“If our claim is successful, it will finally stop these firms from taking advantage of their loyal customers and stop the immoral practice of loyalty penalties,” Mr Gutmann said.