”Consumers overpaying on mobile contracts due to confusion or stupidity”?
Published June 9, 2011 | 
If you take this report at face value without any knowledge of the industry one could be easily fall under the impression that the general public are being duped / mis-sold into mobile phone contracts that are not suitable for their requirements and certainly the title of the article ”Consumers overpaying on mobile contracts due to confusion” would lead you to believe this to be the case, however the truth of the matter is this:
Consumer mobile users must take some responsibility for researching their own needs and look at their actual usage rather than what they perceive to be a good deal – for example what is the point in having a tariff which affords unlimited text messages (subject to the networks fair usage policy) when you only send an average of 10 a month – the common answer is that ‘’it was included in the tariff’’ but the reality is that the consumer didn’t look for a tariff to match their text usage and while this might have been included they would have been paying for it somewhere!
However the number one reason that consumers are spending an average of £200 more for their phone contract is because they use their mobile tariff as a finance agreement for their new phone because they do not have the disposable income to contribute towards the cost of the handset and if they do have the disposable income one can only draw the conclusion that these people are not very good at maths!
Customer using 80 minutes and 750 texts and 250 mb of data recently asked one of my sales advisers for a quote based on a 24 month agreement including the new (at the time) HTC Desire HD, my sales adviser quoted them a £15 per month tariff (including VAT) which provided unlimited texts and 100 minutes per month with 500mb of data, this adequately took care of their needs and provided a buffer in the event that there usage increased (not forgetting that you can always increase your tariff with the network in the advent that your usage rises) because the HTC Desire is an expensive handset he explained that it would not be free of charge with the contract and he would need to charge them £225 for the phone and as a result the if their usage stayed at the present rate the whole package including the charge for the phone would cost them £585 over the 24 months – not a bad deal when the SIM FREE price for the phone was approximately £450 at the time. So the customer thanks my advisers for the quote but asks what tariff would they need to go on in order to get the handset free of charge, despite my sale person explaining this was a far more expensive option and they would be paying far more than is necessary the customer was insistent that they would like a quote based on the phone being free of charge so they were reluctantly quoted £45 per month for 1200 minutes , 1GB of Data and unlimited texts and the handset was indeed free of charge in terms of no upfront charge but the total cost of this was £1080 over the course of the contract. And guess which option they went for? That’s right the £45 a month tariff – now ask your self was this customer mis-sold or duped into the wrong contract? I DON’T THINK SO and yet despite being given all the correct advise they have purchased over 10 times more minutes than they required and 4 times more data than required and when all factors are taken into consideration are now spending £247.50 more per year and will do so for at least 2 years based on their 24 month contract term! Now ask yourself are ”Consumers overpaying on mobile contracts due to confusion or stupidity”? At the end of the day you wouldn’t buy a car and agree to purchase a quantity of petrol every month which you knew you didn’t need so why do it with a mobile phone! Click here for the original BBC article H-J Kempf Independent Mobile Specialist.
