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CAB - Mobile phone customers locked into longer contracts with bad service

Consumers billed for services they didn’t get – or even calls run up by thieves

The shift to longer contract lengths for mobile phones has left some consumers facing contract exit fees as high as £800, despite bad coverage or missing features, a new report from Citizens Advice on the state of the mobile phone market finds.

New research from the national charity examines what prompted the 21,500 mobile phone problems reported to the Citizens Advice consumer service last year. The report, Calling the shots?, reveals that there is widespread confusion over who is responsible when things go wrong with their mobile. The report highlights the issues people face over faulty phones, shock bills run up by thieves, and people trapped into paying for poor service.

The report found:

  • Mobile phone contracts are now 19 per cent longer than in 2009, with the maximum two-year contract the norm for mobile owners
  • Most phone contracts fail to specify a reasonable minimum service they could expect from their phone, meaning customers did not have the right to cancel contracts that did not deliver what was advertised
  • People who pay for contracts that include 3G or 4G but can’t get these, or those who can’t get signal at home or work, are in some cases still told they must honour full contracts or pay the remainder of as much as £800 to end it early
  • Some people reported being charged the full amount of their contract to cancel it before they had even received the phone
  • The continued failure of phone providers and Government put in place a cap on mobile phone bills run up by thieves has resulted in consumers who sought Citizens Advice’s help losing a total of £140,000

Citizens Advice is warning that though average mobile phone bills are down, longer contracts mean bigger financial decisions. At a time when many people are having to budget carefully hidden contract costs can have a huge knock-on-effect for consumers just trying to get the service they have signed up and paid for.

Gillian Guy, chief executive of Citizens Advice, said:

“Consumers can be taken to the cleaners for ending a mobile phone contract that doesn’t deliver. Longer mobile phone contract lengths can lead to consumers paying as much as £800 to switch despite a lack of paid-for features or even signal. With mobile phones now an essential utility, longer contracts can be a good thing for consumers but only if their rights are protected when they sign up.

“Consumers should only be paying for the service they receive. For consumers to be guaranteed a good deal from their mobile phone providers, clear minimum standards of service and better contract exit rights are needed. A cap to stop consumers being told to pay thousand-pound phone bills run up by thieves is also long overdue.

“Despite important work by Ofcom and Trading Standards to tackle poor practice, people are still passed from pillar to post when things go wrong. Better information for consumers on their rights would encourage confidence instead of confusion among consumers who have a problem. Nobody should be left to fall through gaps in regulation, so the Government should now look into simplifying how mobile phone users can get redress when they are treated badly.”

Of the 21,500 mobile phone problems reported to the Consumer Service:

  • 8,800 (39%) related to faulty handsets
  • 3,500 (17%) related to poor service and leaving contracts
  • 3,300 (16%) related to misleading sales practices
  • 2,500 (12%) related to bill disputes

Faulty mobile phone handsets cause headaches for consumers when manufacturers, network providers and retailers all fail to take responsibility, the report found.  

Citizens Advice has called for mobile phone companies to look at how they treat customers whose bills turn into problem debt. Citizens Advice Bureaux helped people with 62,000 cases of phone and broadband debts last year.


Stuck in a contract with poor service?

  • Speak directly to your supplier about the problems you have had, with evidence if possible, to explain why you should be able to leave the contract

Faulty handset?

  • It is a retailer’s legal responsibility to ensure what they sell is fit for purpose
  • If a mobile phone is not fit for purpose the retailer you bought it from must offer repair or partial refund up to six years after the good has been purchased

Received a shock bill, perhaps from a stolen mobile phone?

  • It is crucial you report stolen phones to your provider and the police as soon as possible
  • If you are charged for unauthorised calls on a stolen phone you should try and negotiate with the network and see if they will reduce the bill.
  • To dispute a bill, write a letter to your service provider. Send the letter to the service provider’s customer services department. Keep a copy of your letter. If your complaint is not resolved satisfactorily, you could complain to the service provider’s redress scheme. Industry rules require service providers to be a member of Ombudsman Services: Communications or the Communications and Internet Services Adjudication Scheme (CISAS).

Citizens Advice

Notes to editors:

  1. Citizens Advice analysed a sample of 500 cases to identify the 4 key issues from the 21,500 problems reported to the Citizens Advice consumer service in 2014.
  2. The cases reported to the Consumer Service are from England and Wales only.
  3. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
  4. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  5. To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
  6. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
  7. Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014  service statistics see our quarterly publication Advice trends
  8. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.
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