The four largest mobile firms in the UK are facing a class action claim with at least £3.285 billion worth of damages.
Vodafone, EE, Three and O2 are being accused of allegedly overcharging on up to 28.2 million UK mobile phone contracts.
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Justin Gutmann, a former executive with Citizens Advice, and law firm Charles Lyndon claim the companies charged customers with 'loyalty penalties', leaving existing customers paying more than new ones for the exact same services.
The lawsuit alleged that long-standing customers were overcharged for handsets beyond the end of their contractual term.
Gutmann said: “I’m launching this class action because I believe these four mobile phone companies have systematically exploited millions of loyal customers across the UK through loyalty penalties, taking over £3 billion out of the pockets of hard working people and their families.
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“These companies kept taking advantage of customers despite the financial crisis of 2008, Covid and now the cost-of-living crisis. It’s time they were held to account.”
If the companies are found guilty, customers who bought a contract made up of a mobile phone and services such as data, minutes and calls could receive as much as £1,823, he claims.
An O2 spokesperson said: “To date there has been no contact with our legal team on this claim. However, we are proud to have been the first provider to have launched split contracts a decade ago which automatically and fully reduce customers’ bills once they’ve paid off their handset.
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“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.”
An EE spokesperson said: “We strongly disagree with the speculative claim being brought against us. EE offers a range of tariffs and a robust process for dealing with end of contract notifications.
“The UK mobile market is highly competitive space with some of the lowest pricing across Europe.”
Vodafone said: “This has just been brought to our attention and we don’t yet have sufficient detail for our legal team to assess.”
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This comes after a 'super complaint' from Citizens Advice to the Competition and Markets Authority (CMA) in September 2018.
They said: “We do not consider that providers should continue to charge customers the same rate once they have effectively paid off their handsets at the end of the minimum contract period.
“This is unfair and must be stopped.”
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