Millions of people could be owed millions of pounds in an emerging scandal over mobile phone charges.
Campaigners are calling for mobile phone suppliers to give refunds to customers who are still paying full rate per month even after paying off their phones.
Because of the way mobile phones are marketed, the cost of the handset is built-in to the monthly fee paid by the customer.
But once the cost of the phone has been paid, phone companies are not reducing their customers’ monthly fees by taking off the handset cost.
Mirror journalist Stephen Hayward said: “Campaigners want networks to give refunds – that could total £500million – in the way that banks settled over payment protection insurance.”
The move comes ahead of new regulations due to start in February when suppliers will automatically switch 1.4 million customers from their standard variable rate to a cheaper Sim-only deal once their contracts end and their phones are aid for.
Regulator Ofcom says the rip-off contracts are costing users and average £11 a month or £132 a year.
The new rules also mean networks will be forced to itemise each part of the package deal for new phones at the point of sale so customers will be aware of exactly what they are paying for.
How much compensation?
Citizens Advice have published a report in which they claim four million users have overpaid £500 million on their deals.
But, amazingly, phone regulator, Ofcom, has no powers to force mobile companies to set particular prices or tariffs and there is no legal requirement for them to pay refunds as they are not in breach of existing rules.
Experts advise that once you are outside of the minimum term of your contact then you can leave penalty free and look elsewhere for a better deal.
The alternative is to haggle with your current supplier to negotiate a reduced rate.
Under the new rules about to come in, your supplier must notify you when your contract ends and since September last year switching has been made simpler and easier by sending a simple text to request your PAC number which is given to your new supplier and switchover is automatic.