UK wastes billions overpaying mobile contracts

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Over three quarters of UK mobile subscribers are overpaying on their contracts, wasting almost £5 billion a year, research has shown.

A Billmonitor report released today claimed users had been overspending by an average of nearly £200 each year as they stuck with contracts not suited to their usage.

Based on real-world billing data, the mobile comparison firm said over half of users were on a tariff too large for them, only using up an average of a quarter of their monthly calling allowance.

Almost a third of customers wasted money due to being on too small a contract, leading them to spend on out-of-tariff costs.

Two in 10 had not taken full advantage of free benefits and allowances.

Many were found to be complacent with their contract choices too, overcompensating in fear of unpleasant billing surprises.

Billmonitor also said contract choices for those who wanted a specific device were both complex and limited.

“Billmonitor’s analysis shows that market offers for individual handsets can differ significantly from network to network – where the total cost of ownership for the same handset and similar contract allowance frequently differs by 50 per cent or more,” the report read.

“For customers with a strong handset preference, it can be difficult to stay informed of the best offers for a given handset, leading to the wrong contract choice.”

Customers have not optimised deals halfway through their contracts either, even though most major providers offer the ability to do this, apart from T-Mobile.

Roaming

Roaming charges have proven to land UK customers with significant costs, according to the report.

It showed the annual UK roaming bill stood at £1.36 billion overall, with data roaming costing more than £443 million a year.

Whilst the majority of UK users are thrifty when abroad, five per cent of roaming callers accounted for around half of the overall spend.

“Observing that the top five per cent spend as much on roaming as many do on an entire holiday, it’s a good thing the EU placed a €50 cap on roaming data last year,” the report read.

“Although even this maximum spend will be higher than many would like.”

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