The biggest cellphone companies in the UK face a £3 billion lawsuit, allegedly overcharging devoted clients
Vodafone, EE, Three, and O2 are collectively facing a class-action claim exceeding £3 billion, alleging that they exploited their market dominance to overcharge around 28.2 million UK mobile phone contract customers. The claim contends that the four major network operators penalized loyal customers, causing them to pay more than new customers for identical services.
It is asserted that even after customers had fully repaid the cost of their smartphones over a two or three-year period, the monthly bills were not reduced accordingly. Former Citizens Advice executive Justin Gutmann and the law firm Charles Lyndon have initiated the legal action, seeking damages of at least £3.285 billion. If successful, affected consumers could potentially receive up to £1,823 each.
The class action, filed with the Competition Appeal Tribunal in London, includes all qualifying consumers by default unless they opt out through specific steps. The claim stems from a "super complaint" made by Citizens Advice to the Competition and Markets Authority (CMA) in September 2018. The CMA's subsequent findings stated that providers should not charge customers the same rate after they have effectively paid off their handsets at the end of the minimum contract period.
Justin Gutmann emphasized launching the class action to hold the mobile phone companies accountable for systematically exploiting millions of loyal customers and extracting over £3 billion from them. The legal action follows ongoing loyalty penalties despite economic challenges like the 2008 financial crisis, the COVID pandemic, and the current cost-of-living crisis. In response, an O2 spokesperson highlighted their efforts to automatically and fully reduce customers' bills once they've paid off their handsets and called for an end to the "smartphone swindle." An EE spokeswoman expressed strong disagreement with the speculative claim, emphasizing their range of tariffs and robust processes for handling end-of-contract notifications in a highly competitive mobile market. Vodafone indicated that it was just made aware of the claim and lacked sufficient detail for its legal team to assess the situation.
