You are here: Home - Household Bills - News -

Price warning over flexible mobile tariffs

0
Written by:
24/07/2018
New breed ‘flexible’ mobile phone tariffs – designed to stop customers being overcharged once their contracts have been paid off – could leave people out of pocket by as much as £69 a year, research shows.

‘Flexi’ tariffs – offered by O2, Sky, Tesco and Virgin – were introduced to stop customers who are out of contract effectively paying again for the same handset by running two separate contracts for the device and airtime.

Once the device is paid off customers automatically just pay for the cost of minutes, texts and data.

But analysis by uSwitch.com shows phone providers are hiking up airtime prices for the convenience of not having to worry about paying twice for the same handset.

The comparison site found mobile customers on ‘flexi’ tariffs could find themselves paying £69 extra a year on airtime alone – 38% more than they need – when compared to the cost of a SIM-only deal from the same provider.

Ernest Doku, mobile expert at uSwitch, said: “On the face of it, these contracts have two main appeals – they give customers the ability to upgrade to the latest smartphones early and they take away the risk of ‘double paying’ once the device part of the contract ends.

“The issue is that once customers are only on the airtime part of the deal, they are often paying a significant premium compared to similar SIM-only deals and this is before you consider that this deal was likely taken out two years ago when the cost of data is likely to have been a lot higher.

“The fact that these deals reduce the risk of customers paying inflated out-of-contract prices is commendable – but they’re far from the best value deals, even with the same network.”

Phone providers may soon be forced to tell customers when their contract is about to end.

Ofcom, the telecoms regulator, is due to consult on introducing ‘end of contract notifications’ to stop customers who do not switch being overcharged.

One in six mobile customers have fallen out of contract and are overpaying by a combined £27m a month, according to uSwitch.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Over a third of mortgages are fee-free

The number of fee-free mortgages have increased by 17% to 2,007 in July 2018, from 1,709 products this time last...

Close