Mobile phone users of the UK have been charged £490m for handsets they already own, according to new figures.
An estimated four million phone owners in the country could be unaware that they have paid above and beyond their obligation to own their device outright.
Citizens Advice said EE, Three and Vodafone routinely charged customers for handsets after they had paid them off in full. It warned that customers were often unaware they were still being charged after their contracts had ended, even though they owned the phone and only needed to continue to pay for calls, texts and data.
The most common mobile contracts are bundled deals, which typically last for two years and do not include information about the cost of the handset .
A study by the advisory service of more than 700 bundled contracts found that consumers would pay more than buying the phone outright in 73 per cent of cases, despite 55 per cent of consumers assuming it was the cheaper option, according to Manchester Evening News.
On average customers are overcharged £22 a month, but this was as high as £38 for high-end phones such as an iPhone or Samsung Galaxy, the charity found.
The study found vulnerable people were at higher risk of being overcharged, with older people twice as likely to be charged for a phone they already owned for longer than 12 months at an potential average cost of £264.
The advisory service is calling on the three companies to separate the cost of the phone from the mobile service – a practice already in place with other providers.
Ofcom is consulting on addressing the problem, but Citizens Advice said the regulator’s proposal of sending a single notification to customers before their contract ends does not go far enough.
Digital minister Margot James said: “It is absolutely unacceptable for consumers to be charged for a product they have already bought. Mobile providers must make it clearer when a customer has paid off their handset and is in a position to switch to a cheaper deal.