Mobile phone deals

The extent of mobile phone penetration may mean ringtones shatter the peace of train journeys on a regular basis. But it has also had the beneficial effect of pushing the cost of new contracts down.

Mobile phone operators in the UK are constantly competing for your attention by bringing out ever whizzier handsets and accessories, and by slashing monthly contract prices.

But it is worth considering whether some of the deals on offer might be more trouble than they are worth.

Some customers purchasing mobile phone contracts from operators including Virgin, O2, Vodafone, T Mobile and Orange are being offered cheap deals on line rental or call time that rely on paying the premiums and then claiming cash back.

This can cut bills, but research by moneysupermarket.com has shown that 25 per cent of customers never claimed back their money.

The way the deals work is that customers pay the full contract price each month during their initial contract period – usually 12 months. To obtain the reduction promoted by the mobile company – such as six months’ half-price line rental – customers have to claim back the cash they have already paid to the operator by sending a copy of their latest bill within 30 days of issue at certain points in the contract, typically at the end of five, seven, nine and 12 months.

The cashback payments are processed within 45 days of the claim and the phone operator will check in this time that no money is outstanding on any of your bills.

If the bill is not sent back within 30 days, the claim is invalid and the customer pays full price for their contract.

Robert Kenley, head of mobiles at moneysupermarket.com says: “Cashback deals can seem too good to be true but the process of obtaining your money can be a hassle with numerous terms and conditions on how and when to claim.”

If customers do want to take out the deals, his advice is to be disciplined and set reminders of the dates that bills need to be sent to the company. Otherwise he recommends consumers consider free or discounted line rental deals available from high-street shops.