EE and Vodafone discount proposals for out-of-contract customers criticised

Discounts proposed by EE and Vodafone for out-of-contract customers will leave too many people continuing to overpay for their handset, Citizens Advice has said.

In July, Ofcom announced commitments from some of the UK’s biggest mobile companies to apply discounts to out-of-contract customers’ bills as it revealed proposals to ban firms from tying customers into “excessively long” split contracts which link together their handset and their airtime for periods of more than two years.

The measures are due to come into effect next month, but are not legally-binding.

O2, Virgin Mobile and Tesco Mobile customers will see their bills reduced to the equivalent 30-day, or best available, airtime deal.

Ofcom is working with O2 in hopes of achieving a similar discount for its out-of-contract customers that buy bundled contracts through its indirect partners, such as Carphone Warehouse.

However, those with Vodafone can expect to see a £5 discount, while EE’s customers will get 10% off, which will apply to all bundled customers’ monthly bills once they have been out-of-contract for more than three months.

Three Mobile is the only major network not to sign up to the commitment.

Vodafone and EE logo
Vodafone and EE logo

The advice charity said the Government should ban companies from charging consumers in this way if Ofcom is powerless to act.

“As the Government and Ofcom have recognised, it is unfair to continue charging people for their mobile handset after their contract has ended,” said Gillian Guy, chief executive of Citizens Advice.

“We were encouraged by Ofcom’s initial announcement about the voluntary commitments from mobile companies.

“However, the discounts proposed by EE and Vodafone today don’t go nearly far enough, and will leave too many people continuing to overpay for their handset.

“We remain disappointed that Three is still refusing to act.

“Mobile companies need to do more to ensure all consumers get a fair deal.

“If Ofcom doesn’t have the power to act, the Government should change the law so it can ban this practice outright.”

Three Mobile logo
Three Mobile logo

EE responded, saying: “We already lead the industry in contacting our mobile customers a number of times before their minimum contract period ends, as well as afterwards, clearly informing them of their options to upgrade, change, or cancel their current plan.

“Ofcom’s changes will ensure this is standardised across the whole industry, which is a good thing for consumers.

“The vast majority of our customers contact us before or soon after they go out of contract.

“This is why we’ll be offering a 10% discount off handset customers’ monthly mobile bills after they’ve been out of contract for three months.”