O2, Vodafone, EE and Three are currently embroiled in a significant class action lawsuit in the United Kingdom, as millions of loyal customers allege that they have been subjected to overcharging. The lawsuit, known as the loyalty penalty claim, asserts that these companies have been billing long-time customers for their mobile handsets even after their contractual obligations have ended.
It has been claimed that as many as 10.9 million phone contracts were impacted between October 1, 2015, and March 31, 2025. The lawsuit is seeking damages totaling at least £1.141 billion. If successful, each affected individual could potentially receive up to £104 for each contract they held with these operators. It is anticipated that numerous customers may have claims against multiple mobile operators.
All eligible customers will automatically be included in the claim at no cost, unless they specifically opt out. This legal challenge, spearheaded by consumer rights expert Justin Gutmann, has been given the green light to proceed to trial by the Competition Appeal Tribunal. It is aimed at representing consumers who have purchased mobile contracts consisting of a phone and airtime services such as data, minutes, and calls.
The claim asserts that operators failed to adjust the charges once the minimum contractual term had lapsed, despite customers having already paid off the cost of their handsets. Consequently, existing customers were reportedly being charged more than new customers solely paying for airtime services.
Justin Gutmann emphasized, «For far too long, phone companies have been exploiting their loyal customers. It is time to put an end to the unethical practice of loyalty penalties.» Initially, Gutmann sought to extend the claim back to contracts from 2007, but the Competition Appeal Tribunal limited the scope to contracts taken out between October 2015 and March 2025.
In response to the lawsuit, O2 mentioned, «At this early stage of the proceedings, we appreciate the Competition Appeal Tribunal’s decision to significantly reduce the scope of the claim as it has no legal basis.» EE stated, «We dispute the substantive allegations of the claim. Our main focus is and always will be to provide an exceptional experience for our customers.» VodafoneThree expressed disappointment with the Tribunal’s decision to certify the claim and vowed to thoroughly review the judgment before determining their next steps.
Money has reached out to the other mobile network operators for their input on the matter. Follow the latest consumer news for updates on this ongoing legal battle.
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