Consumer champion Martin Lewis has issued a stark warning to millions of mobile phone users across the UK, exposing what he describes as an "immoral" practice that sees customers paying hundreds of pounds more than necessary for their contracts.
The 'Dirty Trick' in Mobile Contracts
Speaking on his ITV Martin Lewis Money Show Live this week, the personal finance expert detailed how mobile phone companies, particularly resellers, employ what he called a "dirty trick" that affects both iPhone and Android users. Lewis explained that while the practice isn't illegal, he considers it deeply unethical and is urging consumers to take immediate action.
How the Contract Trap Works
Lewis outlined the fundamental difference between how main networks and resellers structure their contracts. "If you go for a main network," he explained, "you'll normally get an airtime cost—that's your tariff—and a handset cost that you pay for two years when you get a new handset from them. After two years, when this is paid off, you just pay the airtime cost."
However, he revealed that many resellers operate differently. "What a lot of the resellers do is they give you one price that includes the handset and the airtime, and after two years, when you pay the handset off, you keep paying the same amount. So while you could be getting a SIM that's worth £6 or £7 a month, you're paying £30 a month."
The Scale of the Problem
The MoneySavingExpert founder emphasised the enormous scale of this issue, stating that approximately 14 million people in the UK are currently paying too much for their mobile contracts. Many of these individuals are continuing to pay for handsets they've already fully paid for, often without realising their contracts have ended.
"The problem is, it's not illegal," Lewis stated. "It may be immoral, in my personal view—and that's a subjective opinion—but it's not illegal, so you're going to struggle to get it reimbursed because they just said, 'This is the amount that you pay with us and we'll give you a handset as long as you're paying for two years.'"
Three-Step Solution to Save Money
Lewis provided clear, actionable advice for mobile users to check their contract status and potentially save hundreds of pounds annually:
- Check Your Contract Status: Text 'INFO' for free to 85075 to determine if you're out of contract. If the response shows "Early Termination" or "Cancellation Charge" as £0, your contract has ended.
- Use Comparison Sites: Visit cheap SIM comparison websites rather than going directly to major operators. Lewis noted that "most of the deals are not available direct from the mobile phone companies because then they might have to give them to existing customers."
- Switch Providers: If you want to keep your number, text PAC to 85075 to get your Porting Authorisation Code, then provide this to your new provider.
Changing Market Dynamics
The consumer expert highlighted the significant shift in mobile pricing over recent years. "Prices have been going up and up for existing customers," he observed. "At the same time, the cost of new customer SIM deals has been plummeting. For 50GB two years ago, you'd have been paying £9. Now you can get it as cheap as about £3 a month."
He pointed to what he called a "dispersal" in pricing, with existing customers facing increasing costs while new customers benefit from dramatically reduced rates.
Important Considerations
Lewis addressed common concerns about switching providers, particularly regarding network coverage. "There are only four mobile networks in the UK," he reminded viewers. "Every other one is piggybacking off one of those four. So you want to do a comparison that says, 'What's the cheapest deal on the signal that I currently have?'"
He recommended using the cheap mobile finder on his MoneySavingExpert website to search for deals that match your current network coverage.
The finance expert also noted exceptions to his advice, stating that people on multiple-phone family deals won't receive a response from the text service and should use his rule of thumb instead: "If you've not changed in two years, you're likely to be out of contract."
Urgent Action Required
Lewis concluded with a powerful call to action for mobile users. "My main message: Do that text, see if you're out of contract and check before prices go up. Whether you can save a shed load by switching—hope that helps."
He emphasised that with 14 million people potentially overpaying for their mobile services, immediate checking and switching could collectively save British consumers millions of pounds annually.
