Three spanked over £32.4m customer loyalty penalty

Three1Mobile phone giant Three UK has been accused of ripping off loyal customers by forcing them to pay an extra £32.4m a year after refusing to sign an Ofcom pledge – already backed by rival operators – to apply automatic discounts once customers’ contracts have expired.
Ofcom revealed its so-called “Fair Deal” action plan in July, setting out a range of measures to increase fairness for mobile customers, including greater transparency, fairer contract terms and a range of price cuts by operators.
With many mobile customers paying for both their handset and airtime bundled together in a single contract, the regulator has long been concerned that customers could be paying more than they need to once they pass their initial contract.
In response, Virgin Mobile, Tesco Mobile, O2, Vodafone and EE have pledged to reduce their prices for out-of-contract customers, with most bringing in tariffs similar to SIM-only deals.
However, with Three ignoring the measures, UK consumer charity Citizens Advice has calculated that customers of the Hutchison-owed operator are being overcharged up to £2.7m each month, with up to 210,000 customers paying “the loyalty penalty” for staying in contract.
Citizens Advice chief executive Gillian Guy said: “It’s unacceptable that Three still thinks it can penalise its loyal customers by over a million pounds every month. It cannot continue to bury its head in the sand.
“While Three claims in its ads that ‘phones are good’, its customers may find their experience anything but, as their provider falls behind in refusing to end this practice.”
Ofcom commented: “We agree that it’s very disappointing that Three has refused to reduce bills for its out-of-contract customers. Three is the only one of the major mobile companies not to take action and its customers will continue to overpay as a result.”
However, Three, which recently appointed MRM McCann to its customer marketing account, insists the proposals are not in customers’ best interests.
A spokesman said: “Three has some of the lowest prices and unmatched propositions on the market. We’ve always put customers first and continue to do so. Applying an arbitrary discount to tariffs will not effectively tackle what really matters – helping them to find a contract which is both best-suited to their needs and priced fairly.
“As the leading campaigner for easy switching for the mobile industry, we are working hard to create a market where customers are engaged and happy, by pushing for easier switching, all handsets to be unlocked, end-of-contract notifications and best tariff advice.”

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