Three of Britain’s biggest mobile phone networks – EE, Three and Vodafone – routinely charge customers extra for their handsets after they have been paid off.

Many customers are unaware they are being charged for handsets after their contracts have ended, even though they own the phone and only need to continue paying for calls, texts and data.

Gillian Guy, chief executive of Citizens Advice, said: “It is unacceptable that mobile providers are knowingly overcharging customers for phones they already own.

“We’ve heard a lot of talk from government and the regulator but now we need action. Other companies have already stopped doing this so we’re looking for these three major providers to follow suit.”

Research by the charity found customers are overcharged £22 a month on average – although the figure could be as high as £38 for high-end phones such as an iPhone 7 or Samsung Galaxy.

Vulnerable people are more at risk of being overcharged. Older people are twice as likely to be charged for a phone they already own longer than 12 months, which could cost them on average £264.

Popular bundled mobile contracts, which typically last two years, confuse consumers, with most (55%) assuming it is the cheaper option.

What can you do?

“Consumers should check their phone bills to see if they can save money with a SIM-only contract or upgrade to a new phone,” Guy said.