New EU Rules To Prevent Mobile Phone Contracts Getting Longer
Published: 21 February 2011 By MoneyHighStreet Staff Leave a Comment
Most consumers are locked into 24 month mobile phone contracts, but attempts by some phone companies to extend terms to 36 months will be blocked by new EU rules coming into force soon.
There are three times the number of people tied into 24 month contracts, than those with 12 month deals, according to findings by uSwitch.com.
There is a tendency for phone companies to try and extend tie in periods up to 36 months for new customers. uSwitch.com has found over three thousand 36 months deals are already on the market.
New EU legislation, which comes into force on May 1st, will halt this trend, however, bringing back 12 month contracts and banning any contract longer than 24 months.
The new rules will force phone retailers to offer a 12 month contract and ban them for offering 36 month deals.
The downside to these restrictions on contract lengths is that there will be fewer free phone deals available, particularly for 12 month deals, as Ernest Doku, technology expert at uSwitch.com explains:
“Without a doubt, smartphones are the biggest culprit in the plethora of longer term contracts to hit the market. These high-tech objects of desire are worth as much as £600 and there has to be a way for the phone retailer to claw back this cost if the consumer is unable to pay for the handset up front. Smartphones have proved great bait for providers in not only snaring new customers, but in making them commit to a longer contract.”
“Come May, providers will also have to offer a 12 month contract option. This may help those just after a basic handset to call and text from, but it will be very surprising to see best-selling handsets being offered for free on a 12 month deal. If you can afford to pay for your phone upfront, SIM-free could be the best option. But for those that can’t afford the initial outlay, a 24 month contract will remain the most cost effective way to lay your hands on a shiny new smartphone for free.”