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A Combined Handset and Airtime contract is a contract in terms of which a person acquires a mobile telephone device or another device which, with a SIM card, enables the user to access a mobile communications network (“Handset”) and agrees to make regular payments that are calculated to pay for the Handset and other services such as text messages, phone calls and data (“Airtime Services”) over a minimum contractual term (“Minimum Term”).
Justin Gutmann in an interview with the Daily Mail on his motivation for leading the Class Action against four major UK mobile network providers.
Listen to Justin Gutmann's Interview with 5 Live Breakfast
Listen to Justin Gutmann's Interview with 'Good Morning Scotland'
During the Minimum Term of a Combined Handset and Airtime Contract the person must continue to pay the regular monthly payments unless he or she chooses to end the contract by paying an early termination fee.
At the end of the Minimum Term, unless the customer terminates the Combined Handset and Airtime Contract, they must continue to make regular payments at the prevailing rate, even though the Minimum Term has expired, and the Handset has already been paid for in full.
Accordingly, people who do not immediately terminate their Combined Handset and Airtime Contracts at the end of the Minimum Term are required to overpay for the Airtime Services, since their monthly charges were not reduced to the relevant SIM only price but were instead kept at the same level despite the Handset having already been paid for over the Minimum Term.
Justin believes that the reality of the situation is that these overpayments, are a concealed trap for most of those “loyal" customers who do not immediately terminate their Combined Handset and Airtime Contract on expiry of the Minimum Term. It is for this reason that regulators and charities alike have referred to these overpayments as “Loyalty Penalties”.
"Approximately 1.5 million people may be paying more than necessary; and collectively, UK mobile customers could be overpaying by approximately £330m each year."
(Ofcom 2018)
"According to a study by the UK communications regulator (Ofcom), 2 million customers on Combined Handset and Airtime Contracts were beyond their Minimum Term, of which 1.4 million would have saved money by switching from their Contract after the expiry of the Minimum Term onto SIM Only Contracts."
(Ofcom 2019)
"For consumers to avoid paying more than they need to, they need to be aware of their mobile contract status and the options available to them when the minimum contract period ends."
(Ofcom 2018)
Mr Justin Gutmann (“Justin”), is a consumer rights advocate and is applying to be certified as the Class Representative by the Competition Appeal Tribunal (“Tribunal”) meaning, if certified, he will be considered by the Tribunal as suitable to act in the proceedings and represent everyone affected by the claims.
Justin comes from a consumer welfare, public policy and market research background and represents other groups of consumers in cases against large companies, such as Apple, London and the South Eastern Trains Limited and the Stagecoach South Western Trains Limited. He has a particular focus on market dominance in both the mobile phone and network provider industries.
Justin has instructed Charles Lyndon, a specialist consumer-focused litigation firm, to represent him in his claims. Charles Lyndon is known for their expertise in competition law with a wealth of experience in bringing collective proceedings.
Find out more about Justin and Charles Lydon here.
The Proposed Defendants are the four main mobile network operators in the UK, namely: Three, Vodafone, EE and O2 “the Proposed Defendants”.
The claim is on behalf of “natural persons” who are alleged to have suffered loss through the overpaying of a loyalty penalty whereby consumers continue to be charged the prevailing rate of their bundled contract, after the expiry of their minimum contractual period notwithstanding that the costs of the Handset (which has been considered to determine the original price payable throughout the minimum contractual term) has been paid off in full and recovered by the Proposed Defendants; as a result, it is excessive and unfair for the Proposed Defendants to charge such consumers the prevailing rate of their bundled contracts for Airtime Services which are in excess of the comparable/equivalent SIM-only price charged to new customers.
The claims are brought on behalf of "natural persons” (i.e people, not corporate entities) who entered into at least one Combined Handset and Airtime Contract with the Proposed Defendants, under an Included Brand at any time and paid at least one Loyalty Penalty.
The Included Brands include:
In the case against Vodafone: the “Vodafone” brand;
In the case against EE: the “EE”, “Orange” or “T-Mobile” brands;
In the case against Three: the “Three” brand; and
In the case against O2: the “O2” brand.
The claims also include sole traders who use their Handset for dual use i.e business and personal use. However, the claims exclude natural persons in a business partnership.
You can find out more about who we are and what the Loyalty Penalty Charge claim is about by visiting our FAQs page.