How Vodafone, EE, Three and O2 mobile phone customers could claim £1,823

Vodafone, EE, Three and O2 are facing a 'Loyalty Penalty Claim'. Credit: PA

The UK's four largest mobile phone network operators could be forced to pay out £1,823 to some customers.

It comes after a claim against them alleges the companies have been abusing their dominance in the industry to overcharge customers.

Vodafone, EE, Three and O2 are facing a "£3-billion-plus" Loyalty Penalty Claim which accuses them of billing long standing customers more than new customers.

The legal action, which has been brought by former Citizens Advice executive Justin Gutmann and the law firm Charles Lyndon, states that 28.2 million contracts have been overcharged.

What is the Loyal Penalty Claim?

Contracts often involve repayments for the handset over a set timeframe, typically one or two years, in addition to airtime services such as data, minutes and calls.

The Loyalty Penalty Claim alleges that the mobile network operators failed to reduce the amount charged once the minimum contractual term expired, despite the fact that 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.

How much can customers claim if they've been impacted?

Mr Gutmann and Charles Lyndon are seeking damages of at least £3.285 billion.

This means that someone who held a contract with just one of the mobile operators could receive as much as £1,823 if the claim is successful.

Many consumers are expected to have claims against more than one mobile operator and so could receive even more compensation.

How can customers claim?

Customers qualifying for the claim are automatically included in the action for no cost, unless they request to opt out.

What triggered the legal action?

The claim follows a rare super-complaint from Citizens Advice to the Competition and Markets Authority ("CMA") in September 2018.

The CMA found that: "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".

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