New undercover research reveals that consumers continue to be pushed to sign up for mobile contracts that could see them overpay for their phones, despite assurances from some operators that this is not the case.
In April, Virgin Media O2 revealed that millions of Brits are overpaying for their mobile handsets in a problem that is costing consumers £530 million each year. Research demonstrated that three of the four UK mobile network operators (EE, Vodafone and Three) are continuing to charge millions of customers for their handsets long after they have finished paying for them.
In order to investigate the ‘Smartphone Swindle’ further, Virgin Media O2 wanted to understand how simple (or not) it is for consumers to take out a split contract with EE, Vodafone or Three.
To do that, Virgin Media O2 sent independent, professional mystery shoppers onto UK highstreets and operator’s websites posing as new customers looking to take out a contract on a new handset.
Despite EE labelling Virgin Media O2’s campaign ‘misleading’ and claiming to offer split contracts, findings from the secret shopping visits show that when entering an EE store to enquire about a new contract, none of the secret shoppers were able to sign up to a split contract.
And despite searching the EE website extensively, the expert secret shoppers were unable to find a ‘Flex Pay’ plan or any other form of split contract.
Vodafone and Three fared better, with shoppers proactively offered a split contract in all Vodafone and most (80%) Three stores, as well as being available online.
Virgin Media O2, which launched its Stop the Smartphone Swindle campaign on behalf of consumers in April, is calling on the other mobile network operators to help put an end to the issue of mobile phone overpayments with three clear asks:
Even though some operators are now offering split contracts, there’s still action that needs to be taken, as millions of customers currently on older bundled deals are at risk of overpaying for their phones when their contract ends. Worryingly, the secret shopping revealed this wasn’t always made clear to consumers when they asked about it.
Staff from all providers were unable to definitively say what would happen when asked if friends who had been out of contract for a long time could still be paying for their phones, highlighting the confusion which surrounds the issue.
Gareth Turpin, Chief Commercial Officer at Virgin Media O2, said:
“It’s time for the industry to end this half a billion-pound problem by providing consumers with choice, consistency and clarity on their phone contracts. This is not about picking a fight with our competitors; it’s about increasing awareness of a key consumer issue and urging others to help solve it.
Consumers are not getting the information they need, with millions finding themselves paying twice for phones they already own. Confusion abounds, with some claiming to offer split contracts that are seemingly impossible to get hold of online or in all the stores our expert shoppers visited.
“While it’s great to see more operators offering their customers split contracts, a decade on since O2 first launched these plans, we hope they’ll now join us in automatically rolling down direct customers once their device is paid for, and providing clear information when the phone is paid off to help end this smartphone swindle once and for all.”
Based on the mystery shopper findings, Virgin Media O2 is encouraging consumers to check what happens at the end of their contract and ask three important questions before they sign up to a new one to get clarity on their mobile plan and avoid being swindled.
O2 customers have been able to benefit from split contracts for more than a decade after it became the first operator to introduce these plans in 2013 with O2 Refresh.
The provider is also the only mobile network operator to automatically roll down its direct combined contract customers onto an airtime only plan, ensuring they never overpay for a phone they already own.
Notes to Editors:
The research was conducted by Proinsight Research Ltd between the 26th May to 4th June 2023.
Proinsight used their independent, trained auditors to conduct mystery shops to the selected retailers, in 15 stores across the UK, providing impartial feedback on their experience.
The auditors also visited the operators’ websites and tried to add a split contract to their basket.