Mobile providers respond to legal claim that could see Britons paid up to £1,823

Three of the four major mobile network providers have responded to the class action case launched against them for allegedly overcharging on millions of mobile phone contracts.

The ‘Loyalty Penalty Claim’ proceedings, launched by consumer rights champion Justin Gutmann and the law firm Charles Lyndon, claim Vodafone, O2, Three and EE have overcharged on 28.2 million contracts and are seeking damages of at least £3.285billion.

If successful, someone who held a contract with just one of the mobile operators could receive as much as £1,823.

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.

“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.”

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A Vodafone spokesperson said: “This has just been brought to our attention and we don’t yet have sufficient detail for our legal team to assess.”

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 a highly competitive space with some of the lowest pricing across Europe.” approached Three but the mobile network provider did not comment.

The so-called ’Loyalty Penalty’ claim is being brought on behalf of consumers who have purchased mobile contracts made up of a mobile phone and airtime services such as data, minutes and calls.

When these contracts are agreed upon, their price during the minimum term of the contract includes both the mobile and the use of airtime services.

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The claim alleges that the mobile network operators failed to reduce the amount charged once the minimum contractual term expired, even though consumers had already paid for their mobiles.

This resulted in existing customers being charged more than a new customer would be if they were just paying for airtime services.

Justin Gutmann, the former head of research and insight at Citizens Advice 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 £3billion out of the pockets of hard-working people and their families.”

Most customers of the four mobile network operators who made payments after the expiry of their contractual minimum term are included in the Loyalty Penalty Claim, which is being conducted on an “opt-out” basis.

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This means that the claim is brought on behalf of a defined group of people, but those people do not have to be personally identified. All qualifying consumers will be automatically included in the claim for free unless they follow specific steps to opt out.

Mr Gutmann is encouraging consumers to visit the dedicated Loyalty Penalty Claim website to stay updated on the progress of the case.

Many consumers are expected to have claims against more than one mobile operator and so could receive even more compensation. The class actions have been filed in the Competition Appeal Tribunal in London, United Kingdom.

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