Down £1200 by NOT upgrading!

JackBasta

I bought 2 iPhone 4s's on 02 600 contracts back in 2011 - I was waiting for the iphone 5 to come out so paid more up front so I could get out of the contracts and upgrade after 12 months. The monthly contract amount was £35 per phone. The iPhone 5 came out a bit later and I was a bit underwhelmed so didn't upgrade, and then the iPhone 5s, and again, didn't seem worth it. So we still have our iPhone 4s's and I still pay £35/month per phone.

Someone asked me yesterday how much I was paying for my phones and I told them £35/month per phone which they told me was very steep. I did a bit of investigation and found out that the £35/month is basically made up of 2 components - the subsidy to pay off the handset WITHIN the allotted time of the contract, and then the airtime. My 12 month contract was over in 2012 so at that point in time I should have changed the contracts over onto o2 simplicity which are airtime only contracts, thereby ensuring that I was only paying for the airtime and NOT for a handset that I had already paid off. I could get the same deal for minutes, texts and data on simplicity for just £10/month.

So for both phones I've been paying £70/month for over 2 years, when I could have had the EXACT same service for £20/month.

I spoke to o2 this morning who have immediately moved me onto the simplicity contracts going forward, but have said that there is no way I can claim back the money I have overpaid as I was on a different tariff and it was up to me to contact them to change it.

They went on to tell me that this wouldn't happen on any new tariffs as the handset subsidy and airtime and now actually separate and when the contract is up, the handset bit automatically stops but the airtime bit continues (basically, to stop what's happened to me). I asked the customer services guy why and he actually said "because it was morally wrong what they were doing before".

To add insult to injury, he also told me that they would have told me about my contract being up and the option to change but I had opted OUT of marketing when I bought the phones (to save myself a load of junk mail). What moving me onto a cheaper contract for the same level of service has to do with marketing I have NO idea.

SO I guess that's it then? Anyone had any luck in claiming stuff like this back, or do I just hold out for the forlorn hope that some kind of PPI thing happens in the future and they are forced to pay stuff like this back (highly unlikely, I know).

I had something similar like this happen with my gas/electric account too. This "keep quiet and overcharge them until they notice" strategy really is rampant capitalism at it's worst!

gjchester

JackBasta wrote: »

My 12 month contract was over in 2012 so at that point in time I should have changed the contracts over onto o2 simplicity which are airtime only contracts, thereby ensuring that I was only paying for the airtime and NOT for a handset that I had already paid off.

Your contract was never over. 12 months was the end on the minimum term that you cloud cancel without penalties, After that it became a rolling 30 day contract.

Unfortunalty it was down to you to read the conditions of the contract when you signed it, although to be honest there's so much small print very few people do, (and no I don;t either)

JackBasta wrote: »

I asked the customer services guy why and he actually said "because it was morally wrong what they were doing before".

Not quite...

Its more related to how they charge, many people want to upgrade before the 24 months minimum terms, so the new way offers a way to do that. In addition there was a lot of talk over contract costs increasing within minimum term, as people thought he contract price was fixed. The new method sees the contract cost increases by RPI 12 months after it starts.

JackBasta wrote: »

SO I guess that's it then? Anyone had any luck in claiming stuff like this back, or do I just hold out for the forlorn hope that some kind of PPI thing happens in the future and they are forced to pay stuff like this back (highly unlikely, I know).

I had something similar like this happen with my gas/electric account too. This "keep quiet and overcharge them until they notice" strategy really is rampant capitalism at it's worst!

As I said you agreed to the contract, and didn't check afterwards, no company is likely to phone you asking them to pay less money.

Sorry its not better news....Good luck trying to claim but its will be an uphill battle.

JackBasta

Just as I thought. I'm as mad with myself as I am with them!

visidigi

JackBasta wrote: »

I bought 2 iPhone 4s's on 02 600 contracts back in 2011 - I was waiting for the iphone 5 to come out so paid more up front so I could get out of the contracts and upgrade after 12 months. The monthly contract amount was £35 per phone. The iPhone 5 came out a bit later and I was a bit underwhelmed so didn't upgrade, and then the iPhone 5s, and again, didn't seem worth it. So we still have our iPhone 4s's and I still pay £35/month per phone.

Someone asked me yesterday how much I was paying for my phones and I told them £35/month per phone which they told me was very steep. I did a bit of investigation and found out that the £35/month is basically made up of 2 components - the subsidy to pay off the handset WITHIN the allotted time of the contract, and then the airtime. My 12 month contract was over in 2012 so at that point in time I should have changed the contracts over onto o2 simplicity which are airtime only contracts, thereby ensuring that I was only paying for the airtime and NOT for a handset that I had already paid off. I could get the same deal for minutes, texts and data on simplicity for just £10/month.

So for both phones I've been paying £70/month for over 2 years, when I could have had the EXACT same service for £20/month.

I spoke to o2 this morning who have immediately moved me onto the simplicity contracts going forward, but have said that there is no way I can claim back the money I have overpaid as I was on a different tariff and it was up to me to contact them to change it.

They went on to tell me that this wouldn't happen on any new tariffs as the handset subsidy and airtime and now actually separate and when the contract is up, the handset bit automatically stops but the airtime bit continues (basically, to stop what's happened to me). I asked the customer services guy why and he actually said "because it was morally wrong what they were doing before".

To add insult to injury, he also told me that they would have told me about my contract being up and the option to change but I had opted OUT of marketing when I bought the phones (to save myself a load of junk mail). What moving me onto a cheaper contract for the same level of service has to do with marketing I have NO idea.

SO I guess that's it then? Anyone had any luck in claiming stuff like this back, or do I just hold out for the forlorn hope that some kind of PPI thing happens in the future and they are forced to pay stuff like this back (highly unlikely, I know).

I had something similar like this happen with my gas/electric account too. This "keep quiet and overcharge them until they notice" strategy really is rampant capitalism at it's worst!

Theres nothing you're entitled to, its all in your contract.

I just hope they made clear your terms of the simplicity they have moved you to as there are 30 day and 12 month minimum term options they could have offered.

If the iPhone 6 takes your fancy and they've put you on a 12 month deal you might not be too happy (again).

As for claiming back what you paid, nope, you agreed a price and for that price o2 agreed to supply you with a service. They have/do and therefore no grounds for a refund.

TadleyBaggie

This is why I always buy an unlocked non-contract phone an have a 30 day SIM-only contract.

StuC75

I lesson now learnt on your part.

regarding the handset subsidy \ tariff cost in the past, everyone has always been aware of this, and that's why in the customers interest to always check into that as you enter the last month of the minimum contract period. as that when you would generally renegotiate a new handset\tariff option, or haggle for a discount to keep with the current handset.. Or did you think that the handset was always free in the past??

[Deleted User]

You were probably on the 'old' O2 contracts that didn't separate the phone from the 'mobile usage'. In which case, you should have looked at stepping down the contracts at the end of the 'minimum term'

Iphones generally don't get any supplier subsidy; hence overly expensive

gjchester

ringo_24601 wrote: »

Iphones generally don't get any supplier subsidy; hence overly expensive

Used to be the case when they were exclusively on O2, since then they are easily available with no upfront cost and similar tariffs to the competitors.

JackBasta

I agree that I don't have a leg to stand on. However the FSA have put a lot of things in place to help customers not get ripped off by a lack of knowledge in the financial sector (e.g. enforcing the display of APRs on pay day loans etc). It's a shame that other sectors such as energy and telecoms have not got similar in place. After all, if o2 were forced to contact me about the best deal when my contract ended, they'd still make a fair profit on me - just not as much!

The corporations are in this to make a profit for their shareholders, NOT provide their customers with a good service. They will do whatever the bare minimum the law says they must do.

I'll move from o2 now to a different network. I'm not giving them my custom any more. They've had £1200 more than they should have off me. Not a penny more. They'll actually lose more than they gain in the long run as I've been with them for 10 years and would've probably been with them for another 40. They would have made a lot more than £1200 profit on my accounts over the next 40 years.

However I'm pretty sure all the networks would probably act in the same way. That's the real shame, I guess.

gjchester

JackBasta wrote: »

They'll actually lose more than they gain in the long run as I've been with them for 10 years and would've probably been with them for another 40. They would have made a lot more than £1200 profit on my accounts over the next 40 years.

Not really, you leave O2, and someone just as disgruntled with their network will move to O2. Customer Churn is a constant on all networks.

JackBasta wrote: »

However I'm pretty sure all the networks would probably act in the same way. That's the real shame, I guess.

Yep, however to be fair, for many sectors such as utilities, broadband, tv, telecoms all rely on customer inertia. Consider the banking sector, how many bank accounts do you have where the interest is minimal but you'd can't be bothered to change them, even though they tell you in writing.

Its always a case of being aware of what you pay and whats out there.

Wilt

JackBasta wrote: »

I agree that I don't have a leg to stand on. However the FSA have put a lot of things in place to help customers not get ripped off by a lack of knowledge in the financial sector (e.g. enforcing the display of APRs on pay day loans etc). It's a shame that other sectors such as energy and telecoms have not got similar in place. After all, if o2 were forced to contact me about the best deal when my contract ended, they'd still make a fair profit on me - just not as much!

The corporations are in this to make a profit for their shareholders, NOT provide their customers with a good service. They will do whatever the bare minimum the law says they must do.

I'll move from o2 now to a different network. I'm not giving them my custom any more. They've had £1200 more than they should have off me. Not a penny more. They'll actually lose more than they gain in the long run as I've been with them for 10 years and would've probably been with them for another 40. They would have made a lot more than £1200 profit on my accounts over the next 40 years.

However I'm pretty sure all the networks would probably act in the same way. That's the real shame, I guess.

All other networks (apart from Tesco, which is 50% owned by O2) are still practising the combined phone and airtime contracts - meaning that they (still) wont tell you that you can move to a cheaper deal when your new contract ends - never mind do it automatically which would happen on the O2 refresh plans.

This is how phone contracts have always worked.

The advisor is likely correct - if you weren't opted out of marketing they would have rung to offer you a new contract, subsequently moving you to simplicity when you told them you didn't want an upgrade.