Mobile phone contracts can seem like an easy way to get the latest phone and spread the costs, but you can end up paying more in the long term. There are alternatives that could work out cheaper, and ways to save money on your current contract to help prevent you from falling into debt in the future.
SIM only deals: These offer a package of minutes, texts and mobile data and are similar to traditional mobile contracts. The difference is that you don’t get a phone included in the contract. This can work out cheaper as you’re not paying a high cost for a phone, and you can buy one separately or use one you already have. There’s also usually a lower minimum contract term such as 30 days, so you can cancel more easily if you want to.
Pay-as-you-go: This lets you buy credit in advance and only pay for what you use. There are no long contracts to worry about and you can switch providers at any time. You’ll need to buy or use a phone separately as you’re only paying for the minutes, texts and data you use.
I don’t think my mobile phone bill is fair, what can I do?
If you think you’ve been charged incorrectly, speak to your mobile phone provider. Ask them to check your tariff and explain about any extra charges that have been included.
Mobile phone companies are governed by the communications watchdog, Ofcom. If your complaint isn’t resolved by speaking to your mobile phone provider you can send a written complaint to them. It’s worth including evidence to back up your reason for disputing the bill.
If your complaint isn’t resolved, you can refer the phone company to Ofcom using the guidance on their website.
What if the debt has been sold on to a debt collection agency?
It’s common for a mobile phone debt to be sold on to a debt collection agency once the account has defaulted.
They’ll contact you to arrange a payment, so don’t ignore their letters. Read our guide to dealing with debt collectors.
If a debt collection agency is chasing you for payment of a bill you’ve raised as a complaint with the mobile phone provider, tell them you’re in dispute over the amount. Then refer them back to the mobile phone provider.
If you’re unhappy with the way the debt collection agency is dealing with you, you can make a complaint to Ofcom. In October 2017 Ofcom ruled that mobile companies will be required to make sure that their debt collection policies are “proportionate and not unduly discriminatory”.
What happens when I cancel my mobile phone contract?
If you want to cancel a contract and there’s still something left to pay, you’ll be asked to repay this in full.
When you contact your mobile provider to cancel the contract, you may have to do this in writing. There may be a charge to cancel early, but this could work out cheaper than making payments for the rest of the contract.
If your mobile provider can’t offer you any alternatives or reductions, you should only pay as much as you can afford. You’ll lose the use of the service, and still owe the payments for the rest of the contract term, but you may be able to pay this off over a longer term once the service is cancelled.