Citizens Advice right to urge shake up of mobile billing

“The handset is free,” I was told when I last upgraded my mobile phone contract.

I knew, at the time, that this was about as true as saying Brexit will boost the economy, and that the call centre operative's pants were on fire.

The cost of the phone is included in the cost of the contract, and it is sophistry to suggest otherwise. But does it matter? The price is the price, and most of us upgrade as soon as we can. So there wasn't much point in arguing the toss.

Au contraire, says Citizens Advice. It points out that not everyone does upgrade when they are able. Some keep their old handsets and their old contracts for quite some time.

With the cost of the phone designed to be met over the fixed period of the contract, you would think that the bill would automatically be reduced to reflect that at the end. But the charity says this isn't happening, at least at three out of the top four networks (Vodafone, EE and Three).

This transfers as much as £38 a month for popular high end models, rising to as much as £46 for the iPhone 8, from consumers' pockets into their bulging coffers.

It adds up to a lot of money, because a surprisingly large number of people don't upgrade, or change their contracts to make them cheaper when they can.

Some 23 per cent of over-65s stay put for over 12 months past the end of the fix. For those under 65 the number was, unsurprisingly, much lower - 13 per cent - but that still amounts to a lot of people in absolute terms, and an awfully large sum of money.

The research elicited a range of responses from the companies taken to task. EE's was the most revealing. It said separating the cost of the phone from the overall tariff could sometimes result in customers paying more.

It might actually be right about that. If you just charge one inclusive price you can, in theory, charge less overall through the people who don’t upgrade regularly subsidising those that do.

That sort of thing is rather common in, for example, financial services where banks offer ‘free’ current accounts to those people who remain in credit, that they subsidise through charging excessive fees and high interest rates to those who go into overdrafts, or more specifically, 'unauthorised' overdrafts that aren't pre-agreed.

There are a lot of people who will, at this point, argue that people should take responsibility for themselves. They don’t have to get ripped off. They can keep an eye on their bills, and take action at the end of the fix. It isn't that hard.

But people with busy lives, managing multiple subscriptions, don’t always do that because they don’t always get the time. Some of them, such as the over 65s I mentioned, could be considered vulnerable. They might be reluctant to go through the rigmarole it takes to contact their mobile providers.

Press three to find out if you are due an upgrade, press four to speak to an operator, press five if you find phone menus like that maddening and something you'll put off encountering if you can.

Digital minister Matt Hancock says it’s time for mobile companies to come clean over billing. He wants them to do better. If they won’t heed his call to do so, he has the power to force their hands, and he should use it.