Mobile phone debt
This fact sheet covers England & Wales. We also have a version for Scotland if you need it.
Use this fact sheet to:
- help work out which mobile contract is best for you;
- work out how to reduce your mobile phone bill;
- find out what to do if you are unable to pay your mobile phone bill; and
- help you to dispute your mobile phone bill.
Which mobile contract is best for me?
Shopping for a mobile phone can be confusing. There are hundreds of tariffs to choose from and the hardest task can often be finding the right one for you. The best starting point is to think about what you will be using your phone for. Asking yourself the following questions may help.
Do you already have a mobile phone or do you need to buy one?
How many calls do you make in a month? It is best to work this out in minutes as a lot of plans give you options in minutes.
What types of calls do you make? Do you only call other mobile phones and landlines or do you call premium rate services?
How much mobile data do you normally use? Your mobile data allowance allows you to use the internet on your phone.
How many text messages do you send?
Look at past bills to help you work out what you normally use. Bill monitor can also help you to analyse your current usage and work out what allowances you will need. It is also worth thinking about the type of contract you would like to have. Ofcom, the phone regulator, has a Price comparison page on its website, which can help you to decide your best deal. You have a choice of a monthly contract or pay as you go without a contract. Ofcom also provides a free app that helps you to:
check indoor and outdoor mobile coverage;
check availability for voice, 3G and 4G services from all major mobile providers;
test the performance and speed of your mobile connection; and
improve your internet connection or mobile coverage.
Pay monthly phones
Pay monthly contracts let you to pay for your mobile phone and its use over a fixed period (usually two years). The monthly cost usually includes an amount toward the cost of the phone itself and an allowance for your calls (in minutes), text messages and internet usage (called data). The following tips should help you to find the right mobile phone contract for you.
1. Set a budget
It’s important to work out how much you can afford to pay for your mobile phone each month. You should also think about whether you can afford to pay if the price of your contract goes up. Use our personal budget to help you. If the price of your contract does go up you may be able to cancel.
2. Check your allowances
Make sure you understand how many call minutes, texts and how much data you use. When shopping for a new contract, make sure that the allowances you agree to are enough for you. If you go over your monthly allowance on calls, text or data you will have to pay extra. The extra charges are often at a higher rate. This could mean a much bigger bill at the end of the month than you were expecting.
3. Think about the length of your contract
Pay monthly contracts can be lengthy and normally last between 12 and 24 months. Think carefully before agreeing to commit for so long. Some contracts are flexible and will allow you to change your allowances whilst others do not. Make sure that the contract you are being offered is the right one for you.
4. Check how much you are being charged for your mobile phone
If your contract includes a mobile phone check how much you are being charged for it. The cost of the phone is normally spread over the term of your contract (even if your mobile phone provider says it is free). This will affect how much you are paying every month. Think about whether you would be better off with a cheaper phone.
5. Decide what you want your phone to do
Think about the features that are important to you. Do you watch a lot of videos? If so you may want your phone to have an HD display. If you take a lot of photos you will need to think about the type of camera you will need on your phone. Screen size may also be important.
6. Consider a SIM only contract
SIM only contracts give you an allowance of call, texts and data without having to buy a new phone. These contracts are often cheaper and more flexible. The length of the contract can vary between 1 and 24 months. This type of contract can be useful if you don’t need to buy a new phone, or you are unsure what your phone usage is likely to be.
7. Check your credit rating
If you do decide to sign up for a pay monthly contract you will be subject to a credit check. If you have a poor credit score you could be turned down for a mobile phone contract. We have a fact sheet Credit reference agencies and credit reports that may help. If you are unable to get a pay monthly contract you will need to consider a pay as you go phone. The next section gives more information on this type of phone. ) that may help. If you are unable to get a pay monthly contract you will need to consider a pay as you go phone. The next section gives more information on this type of phone.
What is a mobile contract upgrade?
When your pay monthly contract comes to an end your mobile phone provider may allow you to upgrade. This could mean a change to your package of allowances and a new phone. Some mobile phone providers will allow you to upgrade before your contract ends. Before upgrading you should consider the tips we have outlined above.
Pay as you go mobile phones
Pay as you go (PAYG) mobile phones allow you to only pay for the calls, texts and data that you use. You will have to buy your mobile phone and sim card. Make sure you shop around for the best price. If you have a PAYG phone you will need to buy credit for (or top up) your phone regularly. Each time you top up your phone you will be given an allowance for calls, texts and internet usage (data). It is important that you keep on top of what you are using and spending. Lots of tariffs are available so it is best to shop around to get the right one for you.
How to reduce my mobile phone bill
It can be a shock when your bill comes in and it’s higher than you expected. If this happens regularly then you need to consider how you are using your phone. For some of us the costs of constantly high bills can become unmanageable. If you are worried about your mobile phone bills there are plenty of ways for you to try and save money.
Check your bill
Mobile phone providers don’t always get it right. Check your bill regularly to see if you have been charged the correct amount. If your bill is wrong you can raise a dispute with your mobile phone provider. See the later section Disputing a mobile phone debt.
Make good use of WiFi
You may be surprised at how much of what your phone does relies on an internet connection. Browsing Facebook or YouTube and sending emails will use some of your data allowance. If you’re not connected to WiFi, your phone will use your data allowance to access the internet. If you go over your allowance, you will get a higher bill. Most smartphones allow you to connect to WiFi instead of using your mobile data allowance.
You can change the settings on your phone so it will try to connect to a WiFi source whenever one is available. Always ask the permission of the bill payer before connecting to a private WiFi source.
Most of the major mobile phone providers have access to WiFi hotspots. These allow you to connect to the internet in certain locations. Check with your mobile phone provider to see if this service is available to you.
There are lots of free mobile apps that allow you to make calls and send messages over the internet.
Most apps allow you to set up groups so you can speak or chat with several people at once. These apps tend to rely on the other person using the same app (for example WhatsApp and Skype). Find out which apps your friends and family members use and sign up.
Most of these apps also allow you to call abroad. If you make a lot of international calls this could be a big saving for you.
Check your contract
Are there extras such as voicemail that you don’t really need? You may also have some of your allowances set too high. Do you really need unlimited calls and texts? You may end up paying for calls and texts you don’t need. Some pay monthly contracts will allow you to make changes to your tariff before your contract ends. Check with your mobile phone provider. You can get details of all the prices and tariffs on your mobile phone provider's website.
If you have a contract for a fixed period (for example, 24 months), your mobile phone provider cannot renew the contract for a further fixed period without contacting you beforehand and getting your agreement.
Avoid in-app purchases
Some apps are free to download but will charge you to get extra services (for example, buying extra lives or features in games can be costly). You can turn off in-app purchases on most smartphones. Check with your phone manufacturer if you’re not sure how. In-app purchases are added to your mobile phone bill. This can make the overall cost of a smartphone add up to more than you planned or can afford.
Cap your bill
Your mobile phone provider may allow you to add a limit to how much you can spend on your bill. They will add a cap to your bill so it will never go over the amount you set with them. Ofcom has brought in rules which mean that if you: switch providers, renew your contract or enter into a new contract with your current provider from 1 October 2018, you can request a bill limit. This will be included in your contract. Check out Ofcom's website page Mobile bill limits for more information. See Useful contacts section at the end of this fact sheet for details.
Change the way you pay
Some mobile phone providers will offer a discount for paperless billing and paying by direct debit. Speak to your provider to see what discounts they are able to offer you.
Say no to premium rate numbers
Premium rate numbers are often charged at a much higher rate than a standard call. These types of numbers start with 084, 087, 090, 091, 098, 118 and 070. It’s best to avoid calling these numbers if you can. There are apps that can help you to find an alternative land line number. Money Saving Expert’s Say no to 0870 guide has some useful advice on cutting the cost of calling premium rate numbers.
Cannot read directory information?
If you are visually impaired, or have a disability which means that you cannot easily use a printed directory to find a phone number, your mobile phone provider must make it possible for you to get directory information. They must do this free of charge in a way that works for you. The service must be able to connect you through to the number if you ask them.
If you use a relay service, which allows you to send your call by text, your call should not cost more than if you called the number without using relay.
Haggling the cost of your contract upgrade can save you money. It’s definitely worth asking your mobile phone provider if they can lower the cost of your existing contract (and keep the same allowances). You can even ask them for a new phone at no extra cost. They don’t have to agree, and if they don’t you could always go elsewhere.
Switching mobile phone provider
From 1 July 2019, mobile phone providers will need to comply with Ofcom's guidance to make switching easier.
To switch provider and keep your existing mobile phone number, you need to request a Port Authorisation Code (PAC) from your current provider.
- To request a PAC message the word ‘PAC’ TO 65075.
- Your provider should send you a PAC immediately along with details of any charges for things such as early termination of your contract.
- Give the PAC code to your new mobile phone provider who should complete your switch within one working day.
To switch provider and not keep your existing mobile phone number, you need to request a Service Termination Authorisation Code (STAC).
- To request a STAC message the word ‘STAC’ to 75075.
- Your provider should send you a STAC immediately along with details of any charges for things such as early termination of your contract.
- Give the STAC code to your new provider who should complete your switch within one working day.
Your PAC and STAC code will be valid for 30 days. Once you've switched, the service with your previous provider will be terminated and you should stop being billed from that date. You will be liable to pay any outstanding charges owed at the date of leaving.
Mobile phones and the Consumer Credit Act
You may have signed two agreements with your mobile phone company. One will cover your text, data and usage and the other will cover the handset itself.
If you have signed a contract for the handset, this will be regulated by the Consumer Credit Act. The contract for your texts, data and usage will not be regulated by the Consumer Credit Act.
You will have more rights with a contract that is regulated. Which? has more information on the benefits of Consumer Credit Act regulation.
You can also escalate any complaints about a Consumer Credit Act regulated debt to the Financial Ombudsman Service. See the Complaints section below for more information.
Mobile phone arrears
If you miss a payment on your mobile phone bill your account will go into arrears and your phone may be disconnected. You may be unable to make or receive calls, your mobile provider must warn you before they interrupt or disconnect your service.
Your mobile phone provider can also cancel the contract and take steps to recover the money they are owed, this can include passing your debt on to a debt collection agency. Don’t worry, they don’t have any more powers than your mobile phone provider. As a last resort you may be taken to County Court, this should always be a last resort. See our Replying to a County Court claim fact sheet for more information.
Any missed payment will also appear on your credit file. See our Credit reference agencies fact sheet for more information.
Filling in your budget is the starting point for dealing with your debts. We know that when you are struggling with debt, the thought of writing down your income and outgoings might feel like the last thing you want to do. But doing a budget might be easier than you think.
Use our Digital Advice Tool to complete your budget and get instant tailored advice.
Your budget will show how much money is left over after you have paid for all of your essential costs such as your mortgage or rent, gas and electricity, and food. It doesn’t include payments towards arrears on bills, or credit debts.
Is you mobile phone essential?
Payments to essential costs such as your mortgage or rent, gas and electricity, and food can be included as a regular outgoing on your budget sheet. If your mobile phone is an essential item that you do not want to lose, include the monthly payment on your budget sheet. Examples of why a mobile phone may be essential include the following.
- Having no other means of communication.
- Being unable to access the internet without your.
- Needing your phone to help access benefits.
- Being vulnerable, this may include being elderly, ill or disabled amongst other things.
If you have fallen behind on payments to your mobile phone, the money you owe will be called arrears.
If your mobile phone is an essential item and you have arrears, the arrears will be classed as a priority debt. This is because you will be disconnected if you do not bring the account up to date. If you can afford to, you should budget to meet the usual monthly payment and offer to pay something towards the arrears too.
If you don’t think your mobile phone is an essential item, the monthly payment, and any arrears, will be classed as a non-priority debt. This means you won’t include it as a regular payment on your budget, the debt will be dealt with in the same way as your credit debts.
Make sure that that you only offer what you can realistically afford. If you offer more than you can pay you are more at risk of missing a payment. This could mean that your phone will be disconnected and your contract cancelled.
Ofcom has guidance on how your provider should help if you are in debt or struggling to make your payments. This guidance says your provider should:
tell you about all the support available for customers in debt (such as payment deferrals or payment plans);
avoid restricting services for vulnerable people who are particularly reliant on their communications services, unless all other options have been exhausted;
take account of your circumstances where appropriate when they contact you about a debt, as well as your preferred communication;
tell you about the provider’s social tariff (where available), its eligibility criteria and sign-up process; and
help you by seeking to understand your circumstances before instructing a debt collection agency and by using debt collection agencies that have strong policies for treating vulnerable customers fairly.
You can see the full guidance on Ofcoms website. If you believe your provider hasn't followed any of the guidance, you can make a complaint. See the Complaint section for more information.
If you are struggling to afford mobile data, you may be able to get help through the National Databank. The National Databank is like a foodbank for mobile data.
Telecoms companies donate mobile data to the data bank through SIM’s and vouchers. The National Databank then provides free mobile data, texts and calls to people in need.
To be eligible you must:
- be 18+ years old; and
- be from a low-income household.
And qualify in at least one of the following statements:
- have no access or insufficient access to the internet at home; and/or
- have no or insufficient access to the internet when away from the home; and/or
- not be able to afford your existing monthly contract or top up.
Contact a local Online Centre to check if you may be suitable for free data.
If you need time to get debt advice and find a debt solution, you may want to consider applying for breathing space.
Breathing space will stop most types of enforcement and also stop most creditors applying interest and charges for 60 days.
To find out more, see our Breathing space fact sheet.
Disputing a mobile phone debt
Before disputing your mobile phone bill, you should double check to see if the bill is correct.
Phone-paid services, such as directory enquiries, voting about TV talent shows and donating by text, are charged to your phone bill. If your complaint is about how much you have been charged for using a phone-paid service, contact the company which runs the service to see if you have been charged correctly. You will find the contact details in the message that you received when you used the service. If you don't have the message, but you know the number that you called, use the Service checker on the Phone-paid Services Authority's website to get the contact details. The Phone-paid Services Authority is the regulator for the content, goods and services charged to your phone bill. There is more information about the different kinds of phone-paid services on their website.
If you are not satisfied that you have been charged correctly, you can report the matter to the Phone-paid Services Authority. Contact them on 0300 303 0020 or fill in their online form. You will need the following information:
- name of the service provider or the phone-paid service number;
- a copy of the text message confirming the subscription or the payment; and
- any other information on your telephone bill that might help identify the service.
If you think the bill is wrong, pay the amount that you do not dispute. Write to your mobile provider and ask them to reduce the bill. In your letter you should outline the reasons for your dispute and supply copies of any evidence you may have.
If you are unhappy with the service you have received from your provider, you can make a formal complaint. Ask for a copy of their complaints code or find this on their website. You can make your complaint:
- by phone;
- by post; or
- by email or online form.
If you get an unsatisfactory final response from your mobile phone provider, or your complaint has not been resolved within eight weeks, you can complain escalate the complaint.
You will normally escalate to either Ombudsman Services: Communications or the Communications & Internet Services Adjudication Scheme (CISAS). You can use Ofcom's ADR checker to see which organisation your mobile phone provider belongs to. They can tell your mobile phone provider to put matters right, remove charges, give an apology or tell them to pay for the trouble they have caused.
If you have two agreements and your complaint relates to the handset, you'll need to escalate the complaint to the Financial Ombudsman Service instead.
Communication & Internet Services Adjudication Scheme (CISAS) Phone: 020 7520 3814 Email: firstname.lastname@example.org www.cedr.com/consumer/cisas/
Ombudsman Services: Communications Phone: 0330 440 1614 Email: email@example.com www.ombudsman-services.org/sectors/communications
Phone-paid Services Authority (PSA) Phone: 0300 303 0020 psauthority.org.uk