Vodafone, EE, Three and O2 customers could soon receive a payout of nearly £2,000 as the mobile phone companies face claims of overcharging.

The UK's four largest mobile phone network operators are facing a more than £3.2 billion class action claim for allegedly using their market dominance to overcharge on up to 28.2 million UK mobile phone contracts.

Justin Gutmann, a former executive with Citizens Advice, and law firm Charles Lyndon claims that Vodafone, EE, Three and O2 charged “loyalty penalties”, leaving existing customers paying more than new customers for the same services.

It specifically claims that long-standing customers were overcharged for handsets beyond the end of their contractual term.

Mr Gutmann alleges the firms overcharged on up to 28.2 million contracts and is seeking damages of at least £3.285 billion.

The Gazette: The UK's four largest mobile phone giants are facing a more than £3.2 billion facing a “£3 billion plus” class action claim.The UK's four largest mobile phone giants are facing a more than £3.2 billion facing a “£3 billion plus” class action claim. (Image: PA)

Vodafone, EE, Three and O2 customers could be owed nearly £2,000

If successful, a customer who bought a contract with Vodafone, EE, Three or O2 made up of a mobile phone and services such as data, minutes and calls could receive as much as £1,823.

When these contracts are agreed upon, their price during the minimum term of the contract includes the cost of both the phone and the use of airtime services.

The claim alleges that the firms failed to reduce the overall amount charged once the minimum contractual term expired, despite the fact that consumers had already paid off their phones.

This resulted in existing customers being charged more than a new customer would be if they were just paying for airtime services.

The class action has been filed with the Competition Appeal Tribunal in London.

All qualifying customers will be automatically included in the claim for free unless they follow specific steps to opt out.

The Gazette: All qualifying customers will be automatically included in the claim.All qualifying customers will be automatically included in the claim. (Image: PA)

Mr Gutmann said: “I’m launching this class action because I believe these four mobile phone companies have systematically exploited millions of loyal customers across the UK through loyalty penalties, taking over £3 billion out of the pockets of hard-working people and their families.

“These companies kept taking advantage of customers despite the financial crisis of 2008, Covid and now the cost-of-living crisis. It’s time they were held to account.”

Vodafone, EE, Three and O2 respond to claims they overcharged customers

The four mobile phone giants - Vodafone, EE, Three and O2 have commented about the latest claims.

An O2 spokesman said: “To date there has been no contact with our legal team on this claim.

"However, we are proud to have been the first provider to have launched split contracts a decade ago which automatically and fully reduce customers’ bills once they’ve paid off their handset.

“We’ve long been calling for an end to the ‘smartphone swindle’ and for other mobile operators to stop the pernicious practice of charging their customers for phones they already own.”

The Gazette: See what Vodafone, EE, Three and O2 had to say about the claim.See what Vodafone, EE, Three and O2 had to say about the claim. (Image: PA)

An EE spokeswoman said: “We strongly disagree with the speculative claim being brought against us.

"EE offers a range of tariffs and a robust process for dealing with end-of-contract notifications.

“The UK mobile market is highly competitive space with some of the lowest pricing across Europe.”

Vodafone added: “This has just been brought to our attention and we don’t yet have sufficient detail for our legal team to assess.”