Millions of mobile customers in the UK could be owed compensation after a landmark class action lawsuit was allowed to proceed against the country’s four major mobile operators — O2, Vodafone, EE and Three. The case alleges that long-standing customers were routinely overcharged for their handsets after their minimum contract term expired, exposing what campaigners describe as years of unfair “loyalty penalties” across the telecoms sector.
The legal action, approved for trial by the Competition Appeal Tribunal (CAT), argues that mobile operators failed to reduce customers’ bills after they had fully paid off the cost of their devices. Instead, millions allegedly continued to be charged the same monthly rate as during their minimum term, despite no longer owing money on their handsets. According to the claim, as many as 10.9 million phone contracts were affected between 1 October 2015 and 31 March 2025.
Consumer rights advocate Justin Gutmann, who is leading the action, says the operators’ conduct forced loyal customers to pay more than new customers who only sign up for airtime-only plans. The lawsuit seeks at least £1.141bn in damages, with affected individuals potentially receiving up to £104 for each qualifying mobile contract. Many customers are expected to have claims against more than one network.
All Eligible Customers Automatically Included Unless They Opt Out
The case is an opt-out collective action, meaning all eligible customers will be included at no cost unless they take formal steps to withdraw. It covers contracts that bundled a handset with airtime services — including data, calls and minutes — where the monthly fee should have dropped once the minimum term ended.
Gutmann said the action aims to end what he described as “immoral” charges: “For far too long the phone companies have been taking advantage of their loyal customers. That’s why it’s time to stop the immoral practice of loyalty penalties.”
The CAT narrowed the claim’s scope: Gutmann originally sought to include contracts dating back to 2007, but the tribunal limited the period to between October 2015 and March 2025.
Operators Reject Allegations and Prepare to Fight Case
Mobile operators insist the remaining elements of the claim are baseless. An O2 spokesperson said the ruling “significantly reduced its scope” and argued that the remainder “has no merit” and will be “robustly defended.”
EE also disputed the allegations, stating: “We do not accept the substantive allegations of the claim. Our priority is, and always will be, to provide a great experience for our customers.”
A joint VodafoneThree comment said the companies were “disappointed” with certification but would review the judgment before determining next steps, adding that both intend to “robustly defend this claim.”
Other operators have been approached for comment.
UK Regulators Have Warned About Loyalty Charges Before
The lawsuit follows years of scrutiny from UK regulators over loyalty penalties in telecoms. In 2019, Ofcom raised concerns that long-term customers on bundled contracts were paying too much after their handset costs ended, prompting some operators to introduce optional discounts or automatic price reductions. Despite these interventions, campaigners argue that millions continued to overpay, paving the way for the current legal challenge.
The forthcoming trial could set one of the UK’s largest consumer compensation precedents in the telecom industry.
