Vodafone, EE, Three to Virgin Media, UK Mobile Phone Firms Face Overcharging Claims

 All of the UK's mobile phone network operators face a British class action lawsuit over allegations that the providers overcharged millions of UK mobile customers in a case that could cost them billions. 

Vodafone Group Plc., BT Group Plc.'s EE, CK Hutchison Holdings Ltd.'s Three UK and Virgin Media O2 are being sued for abusing their dominant position in the UK by overcharging for handsets beyond contract terms, according to law firm Charles Lyndon and Justin Gutmann, who filed the collective suit at London's Competition Appeal Tribunal.

A spokesperson from EE said it strongly disagrees with the “speculative claim” being brought against it. 

The so-called loyalty penalty, where long-standing customers are continually charged for handsets despite having paid them off, has previously been examined by UK's competition and communication regulators following a complaint from Citizen's Advice in 2018.

“I believe these four mobile phone companies have systematically exploited millions of loyal customers across the UK through loyalty penalties – taking over £3 billion ($3.8 billion) out of the pockets of hard working people and their families,” said Justin Gutmann, a market researcher who is also leading a class action against Apple Inc. in London.  

Britain's opt-out class-action regime has become increasingly popular route for consumers to hold companies to account. Tech companies in particular have been targeted for abusing their dominant position to overcharge customers. None of the recent filings have made it to a full trial. 

“To date there has been no contact with our legal team on this claim,” a spokesperson at 02 said. “We've long been calling for an end to the “smartphone swindle” and for other mobile operators to stop the pernicious practice of charging their customers for phones they already own.”

The latest suit will still need to be officially notified as a class action by a judge.

“This has just been brought to our attention and we don't yet have sufficient detail for our legal team to assess,” a Vodafone spokesperson said. Three didn't respond to a request for comment.