Watch out for this mobile phone rip-off

Mobile phone providers are making big changes to their tariffs...

Let’s face it, no one is particularly happy about the 2.5% increase in VAT this year. After all, pretty much everything and anything has now gone up in price – everything apart from our salaries anyway.

However, according to recent research*, mobile phone companies are taking the VAT hike to the extreme and are using it as a cover for even more charges.

The VAT increase will add £22 a year to the average household pay-monthly bill, bringing the total to almost £1,040 a year, or £87 a month*. However, many mobile providers have taken this opportunity to introduce a range of price changes, such as more expensive texts and calls, higher charges for paper bills, and the removal of free voicemail.

The worst offenders

Mobile operator, Three, is one of the worst offenders. For new customers who go outside their monthly allowance, they will now be charged 30p per minute for calls – up from 12p per minute – and 30p per text, also up from 12p per text. That’s a whopping 150% increase!

What’s more, anyone not on the ‘all-you-can eat’ One Plan will now be charged for voicemail, and if you’ve opted for paper bills, you’ll be charged £1.50 a month, up from £1 a month.

O2 has also boosted the cost of texts for its pre-pay customers from 10p per text to 12p per text – up 20%.

And if you’re planning to make a phone call with Vodafone while you’re travelling in Europe, watch out – this will now cost you 39p per minute, up from 38p, while receiving calls now costs 15p per minute, up from 14p, and texting costs 11p per text, up from 10p. Although a penny increase might not sound like much, make several calls and you’ll soon see the charges stack up.

Sneaky rip-offs

While it’s understandable that mobile phone tariffs have increased on the back of the VAT rise, using the VAT increase as an excuse to completely re-jig price plans and charge 150% more is just plain sneaky.

So what can you do about it?

The first thing to do is to read the terms and conditions of any new pricing notifications very carefully. Then, if you’re not happy and you’re not locked into a contract, get switching.

If you are locked in, you’ll have to wait until you can get out of your contract before moving elsewhere. But it’s well worth checking when your contract expires and making a note of this so you can switch as soon as possible.

Slash your bills

If you are looking to reduce how much you spend on your mobile each month, these top tips should help:

1. Shop around

As always, the best way to go about finding a better deal is by shopping around. But before you do this, it’s a good idea to find out exactly how many minutes and texts you use each month. You should be able to find this on your latest bill, or your provider should be able to tell you your average usage. There’s a good chance you won’t be using everything you’re paying for, in which case, it’s time you found a cheaper deal.

Once you’ve done that, take a look at the website Recombu which has clever little tools to scour thousands of deals. You can use the slider tools on the site to choose how many minutes and texts you want (and realistically need), together with how much you’re willing to pay each month, and they’ll find a tariff to suit your needs!

2. Consider SIM only

SIM-only deals have grown in popularity over the past couple of years as they can be a great way to save a few pennies – although they are only suitable for those of you who are happy with your existing mobile phone.

If you opt for a SIM-only deal, you’ll be sent a SIM which you can pop into your existing handset. As a compromise for not getting a new phone, you’ll receive many more texts and minutes for your money. This also means you won’t have to be tied into a long contract.

Unlike the 18-month and 24-month contracts that are so common nowadays, SIM-only deals are usually on a 30-day rolling contract (although some are 12 months), so if you find a better deal later on, you can switch at a month’s notice.

Related how-to guide

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3. Get with giffgaff 

Another option to check out is giffgaff. The website employs a community ethos so it’s run by its members. So if, for example, you have an issue with your phone, the users on the website’s community pages can help out. And in return for helping, these users are rewarded with points to go towards cheaper bills for them!

What’s more, if you have an idea for how to improve the site, you can suggest it.

Again, all the deals on giffgaff are SIM only – but the savings are pretty amazing. So make sure you check it out. For example, for £15 a month, you’ll get 300 minutes and unlimited texts and web access!

4. Be careful when abroad

If you’re planning to make a lot of calls while you’re abroad, be careful. Calling from overseas can be very expensive so make sure you look into bolt-on options that many mobile providers offer to save a few pennies.

O2’s International Traveller Service is free to use if your tariff has more than 600 free minutes (otherwise you’ll have to pay £3.06 a month) and reduces calling charges abroad. Similarly, Vodafone Passport allows you to take your UK price plan with you to over 35 countries.

Alternatively, you could, of course, buy a local SIM card once you’ve arrived at your destination as this should work out to be cheaper than using your UK SIM (just make sure your phone is unlocked first).

For more tips, read Slash your mobile phone costs on holiday.

5. Avoid the rip-offs

Finally, watch out for all those rip-offs!

Personally, I’ve never been a fan of mobile phone insurance because it’s always riddled with catches meaning that if you make a claim, there’s a good chance it will get declined. And you may find you’re already covered under your home contents insurance policy anyway – in which case, you’re just throwing money down the drain.

And, as I’ve previously mentioned, being charged for paper billing is also a big rip-off – so make sure you check your bills online instead! You can find out more about these rip-offs and more in The worst mobile phone rip-offs ever.

For even more tips, read Top 10 ways to slash your mobile phone bill.

*Research by uSwitch.

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