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Consumers lose £355m a year on mobile phone handsets


A report from Which? has claimed that consumers are losing a £355 million a year by continuing to pay for mobile phone handsets that they have already bought.

The research found that 46% of people did not upgrade their phones immediately at the end of their contracts, resulting in them paying on average an extra £92 extra for their handset.

When you buy a phone contract, the providers usually work out the combined cost of the headset and tariff over a certain amount of time, usually 24 months. After the 24 months, some people are unaware that they have stopped paying for their phone and carry on paying their normal amount.

Which? also found that clarity of the handset and tariff costs is an important factor consumers consider when switching providers. Customers on EE, Vodafone and Three are charged one bundled price, whereas O2, Tesco Mobile and Virgin Media separate the handset and airtime costs on their bills.

Richard Lloyd, the Which? executive director, said:
“Consumers are being misled and as a result are collectively paying millions of pounds each year for a phone they have paid off. All mobile phone operators should separate out the cost of the handset so people don’t continue to pay after the contract comes to an end. Mobile providers need to play fair and ensure their customers are not paying over the odds.”

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