UK mobile giants face £3 billion class action for alleged overcharging

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A group of migrants inside a mobile phone store recharge their phones, La Laguna, Spain, November 4, 2023. REUTERS/Borja Suarez

The leading UK mobile network operators, including Vodafone, EE, Three, and O2 are facing a monumental £3 billion class action claim for allegedly abusing their superior market position to overcharge customers.

These companies are accused of imposing a ‘loyalty penalty’ by charging long-term customers using mobile handsets beyond the contractual period more than the standard rates.

The lawsuit seeks compensation of £3.3 billion for overcharging on 28.2 million contracts. This development follows an earlier super-complaint from Citizens Advice to the Competition and Markets Authority (CMA) filed in 2018.

The CMA expressed dissatisfaction with the practice of network service providers and questioned why consumers continued to pay the same charges even after settling their accounts, deeming it unfair. “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.” They also added that customers “rightly feel ripped off, let down and frustrated”.

In the event of a successful case, the claimants estimate that up to 50,000 people may be eligible for approximately £1,823 each. A civil suit for damages filed by Cahill and led by the Charles Lyndon law firm is currently underway.

Gutmann, who has been involved in other high-profile cases such as the £768 million class action against Apple and the £73 million class action against Govia Thameslink Railway, is leading this legal case.

O2 reports no contacts with its legal group regarding the claim but notes its previous initiation of split contracts. EE disputes the speculative nature of the lawsuit while highlighting its highly competitive tariffs, well-designed contracts, and end-of-contract notifications.

Three is yet to respond to inquiries about the class action against them.

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