Millions of consumers with bundled mobile phone contracts could receive a “double whammy” on bills this year costing tens of millions of pounds, a network provider has warned.
Bundled contracts refer to deals that combine the handset with the cost of the data plan.
With customers’ entire monthly bills subject to annual inflationary price hikes this month, millions will receive a double hit as prices go up for both their phones and their data, minutes and texts.
According to Virgin Media O2, operators typically buy handsets for a fixed cost from manufacturers. The cost is then passed onto consumers who pay off the cost of the devices through their monthly bills.
However, with millions of people on bundled contracts set to receive price increases on devices too, many could find themselves being charged more than the recommended retail price for their phone over the life of their contract.
Worryingly, Virgin Media O2 warn that bundled contracts can also leave consumers at risk of forking out even more in the long run.
When bundled contracts end, consumers may receive little to no discount and continue to be charged the same amount each month by their provider despite having paid off their devices.
Rob Orr, chief operating officer at Virgin Media O2 said: “In 2013, we led the mobile industry by launching O2 Refresh, the market’s first split contract.
“Not only does this protect consumers from paying extra for their devices whilst in contract, it also means they’ll never pay for a phone that’s rightfully theirs once the deal comes to an end.
“Since we first called on the industry to ‘Stop the Smartphone Swindle’, consumers have forked out the best part of £500million paying for phones they already own.
“This impending price rise double, or even triple, whammy is set to only worsen the problem.”
Virgin Media O2 estimates handset overpayments are costing consumers across the country over half a billion (£530million) every year, with the average impacted consumer worse off by more than £200.
To help Britons protect themselves from paying even more than necessary, Virgin Media O2 is urging consumers to use its online calculator to check if they’re overpaying for their smartphones.
Additionally, it shared four simple steps people can take to prevent further overpayments from happening in the future.
- Split: People could opt into contracts that split the device and airtime bills wherever possible.
- Switch: People who don’t have the option to split their bill and risk overpaying for their handset at the end of their contractcould switch to another operator.
- Save: People can save money by being aware of this issue
- Share: Tell friends and family if they think they might be paying for a phone they already own.
People can access Virgin Media O2’s online calculator here.
