Leading mobile operators in the UK were accused of overcharging consumers by not reducing the cost of joint device and airtime contracts once the handsets had been paid-off in a legal case lodged with the country’s Competition Appeal Tribunal (CAT).
Former head of research and insight at consumer interest organisation Citizens Advice Justin Gutmann is leading the action with solicitors Charles Lyndon. They believe the case is worth at least £3.3 billion and concerns more than 28 million individual contracts dating as far back as 2007.
The suit targets the mobile side of Virgin Media O2, Vodafone UK, EE and 3 UK.
It also covers contracts taken with the now defunct T-Mobile UK and Orange UK brands, which were merged to form the company which became EE.
The so-called Loyalty Penalty Claim alleges the operators abused their market positions in charging existing customers more than new ones by failing to reduce the cost of monthly contract payments at the end of the minimum term, meaning those entering new SIM-only deals were being charged less for the same thing, because the handset would have already been paid for by then.
An EE representative told Mobile World Live it strongly disagreed with the “speculative claim”, adding it “offers a range of tariffs and a robust process for dealing with end of contract notifications”.
Virgin Media O2 said “to date there has been no contact with our legal team on this claim”. It also pointed to the fact it launched split airtime and handset contracts a decade ago, adding “we’ve long been calling for an end to the smartphone swindle and for other mobile operators to stop the pernicious practice of charging their customers for phones they already own”.
3 UK declined to comment, while Vodafone UK had not responded at the time of publishing.