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    HomeFinancial/RegulationUK’s mobile ops face £3.3bn class action, accused of overcharging loyal customers

    UK’s mobile ops face £3.3bn class action, accused of overcharging loyal customers

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    Lawyers claim EE, O2, Three UK and Vodafone did not reduce bill payments once customers had paid for devices, on up to 28.2 million contracts over a 16 year period

    It’s not a good look for the UK’s mobile network providers. The charity Citizens Advices is bringing the claim on behalf of those who were allegedly ripped off, funded by Litigation Capital Management. In a statement, EE described that lawsuit as a “speculative claim”.

    The former head of Research and Insight at the charity, Justin Gutmann, “For too long these mobile phone companies have been using their dominance to rip off their customers by charging loyalty penalties.”

    He accused the network operators’ practices as “exploitative” and it is not the first time such practices have been scrutinised. In 2018 a group of bodies that seek to protect consumers’ rights complained to the UK’s Competition and Market Authority (CMA) about customers being penalised for their loyalty in mobile and other sectors.

    The CMA agreed the practices were unfair and should cease, and claimed in 2020 that progress was being made. In 2019, telecoms regulator Ofcom announced new protection measures “to increase fairness for mobile customers”.

    What’s changed?

    But as we head into 2024, lawyers from the City-based law firm Charles Lyndon are claiming that the UK’s four biggest mobile operators continued to charge 5 million customers for devices after they’d paid for them, via 28.2 million contracts, over 16 years.

    Put another way, after the minimum term of contracts expired, which covered the cost of buying a device and services (phone calls, texts and data), customers were charged the same amount monthly. So by staying with the operator, they continued to pay for a device they owned.

    The class actions have been filed with the UK’s Competition Appeal Tribunal. The operators are being sued individually, seeking damages of up to £1.4 billion from Vodafone, up to £1.1 billion from EE, up to £570 million from Three and up to £256 million from O2.

    Those affected by the alleged overcharging could receive payments of up to £1,823 each. All of those who qualify to be represented in the class action will be included automatically, but have the right to opt out.

    EE claims its processes are rigorous and the law suit is speculative, while Vodafone said it did not have enough information about the lawsuit to comment, Three refused to comment and O2 said its legal team has yet to be contacted about the matter.

    Separately, Ofcom is investigating inflation-linked telecoms price rises after a number of telcos were accused of raising prices well beyond the rate of inflation during the life of customers’ contracts. The project was announced last February.