Original article ISPreview UK:
Mobile operators including EE (BT), Vodafone, Three UK and O2 (Virgin Media) yesterday attempted to dismiss a class action claim worth “at least” £3.285bn. The case, brought by consumer rights champion Justin Gutmann and law firm Charles Lyndon, accuses the operators of overcharging for mobile handsets beyond the end of their contractual term.
As most people know, mobile operators tend to offer a choice of either SIM Only (airtime) plans or plans that bundle those in with a handset (e.g. Smartphone). However, the legal case itself centred around bundles, which tend to cost more because you’re also spreading the cost of the handset across the contract term. The problem comes when some operators maintain the same monthly charge, even after your contract ends (i.e. you effectively keep paying for the handset, which has already been paid off).
NOTE: Back in 2018 Ofcom estimated that c.1.4 million UK consumers were out of their contract and still paying instalments towards a handset that had already been paid off (
here).
At this point, a wise consumer would of course just switch to a SIM-Only option on a different operator or re-contract to a new plan, but not everybody does that (some people just forget or don’t realise). Ofcom has since put pressure on the mobile operators to mend their ways and in recent years there have been some improvements (with mixed success), but the aforementioned class action claim is more concerned with historic “overcharging“.
At the end of 2023 Justin Gutmann, a former Head of Research and Insight at the UK’s statutory consumer champion, Citizens Advice, launched class action proceedings (here) against the UK’s four primary mobile operators (“Loyalty Penalty Claim“). The case alleged that the operators had been “abusing their dominant positions” by charging a “loyalty penalty,” in which long-standing customers were overcharged for handsets beyond the end of their contractual term.
The case claims that operators have overcharged on up to 28.2 million contracts and, as a result, will be seeking damages of at least £3.285 billion. If successful, someone who held a contract with just one of the mobile operators could receive as much as £1,823. Many consumers are expected to have claims against more than one mobile operator and so could, hypothetically, receive even more compensation.
NOTE: The class actions have been filed in the Competition Appeal Tribunal (CAT) in London. This is an opt-out claim, which means qualifying consumers will be automatically included on the claim at no cost, unless they specifically opt-out.
The estimated loss across all mobile network operators since 2007 has been estimated below, all figures are said to include “simple interest“. If distributed evenly, contract holders from the mobile network operators listed below are estimated to receive the following amounts:
Customer Compensation Assumptions
➤ Vodafone – up to £1,823
➤ EE (BT Group Plc) – up to £1,101
➤ Three (Hutchinson 3G UK Limited) – up to £1,817
➤ O2 (Telefonica UK Limited) – up to £1,178
The relevant (linked) cases against each operator are listed below.
Case Links by Operator
➤ 1627/7/7/23 – Mr Justin Gutmann v Telefonica UK Limited
➤ 1626/7/7/23 – Mr Justin Gutmann v Hutchison 3G UK Limited
➤ 1625/7/7/23 – Mr Justin Gutmann v EE Limited and BT Group PLC
➤ 1624/7/7/23 – Mr Justin Gutmann v Vodafone Limited and Vodafone Group PLC
The first certification stage of this case occurred yesterday with an initial hearing (CPO Application and Limitation) and the mobile operators promptly attempted to have it thrown out. The operators argued that the lawsuit is fundamentally flawed, not least because they say it alleges anti-competitive behaviour “in an industry renowned for its competitiveness” and because large parts of the case (dating back to 2007) were brought too late.
In addition, the operators argued that it was “extraordinarily difficult” for them to identify eligible class members. All of the aforementioned points do have some merit to them, although it’s not yet clear how the judge will respond. But even if the case isn’t thrown out before it reaches a full trial, then it’s possible that arguments like these may yet succeed in placing some additional restrains on the case or its scope.
Big legal cases like these often have to grapple with various complex issues, such as with respect to how the law approaches consumer choice, package / brand value and ignorance of contract details. At the same time mobile operators also have the freedom to set retail pricing however they so choose, albeit often restricted by the realities of natural competition (i.e. making your service too expensive can be counter-productive).
At this point it’s worth highlighting how the separate Collective Action on Land Lines (CALL) campaign recently tried and failed to argue a different class action case against BT (here), which related to the alleged overcharging of several million landline-only phone customers. But the court ultimately dismissed the case and found that BT’s “prices were not unfair, and therefore there was no abuse of dominant position.”
However, Gutmann’s case against the mobile operators argues something quite different from CALL’s case, which leaves open the door for a potentially very different outcome.
), the Whiff-Fi box turns a customer’s searches into scents, filling their space with over 40,000 different aromas – from lavender for deep relaxation to that nostalgic old-book smell. For example, with Whiff-Fi, shortly after a customer searches for “freshly baked cookies”, they will notice that their home begins to smell like that.
. But call me silly because it actually doesn’t sound like a completely terrible idea, provided you avoid certain websites (e.g. your council’s refuse collection pages, among other more.. questionable haunts). You’d probably also want to avoid internet messaging apps involving flatulent “friends”.
