Loyalty Penalty
Claim
THE CLAIM AGAINST THE MOBILE NETWORK OPERATORS
Charles Lyndon, alongside consumer rights advocate Justin Gutmann, has launched collective proceedings against the UK’s four main mobile operators:
Three, Vodafone, EE, and O2. Mr Gutmann alleges these companies have exploited their dominant market position by overcharging loyal customers who failed to terminate their combined handset and airtime contracts at the end of the minimum contractual period. The case claims that charges were not adequately reduced after the handset was paid off, leading to significant financial losses. The proceedings seek approximately £3 billion in compensation for between 2.3 million and 4.8 million customers, highlighting the extensive scale of alleged overcharging.
Who is involved
Justin Gutmann, the proposed class representative, is a well-known consumer rights champion with expertise in market dominance issues.
He represents consumers who entered into “Combined Handset and Airtime Contracts” with the major operators, which are contracts where customers pay monthly instalments covering both the handset and airtime services over a fixed minimum period. Once the minimum term ends, if customers do not cancel their contracts, they continue paying at inflated rates despite owning the handset outright, leading to unfair overpayment.
Justin has instructed Charles Lyndon, a specialist litigation firm experienced in competition law and collective actions, to handle the case on behalf of individual consumers. The claim operates on an opt-out basis, meaning all qualifying UK customers are included unless they actively choose to opt out. This legal action follows regulatory findings by the Competition and Markets Authority, which condemned unfair loyalty charges and urged operators to end these practices.
“I am delighted to be the Proposed Class Representative in these claims against the UK mobile network operators Vodafone, EE, Three and O2. For years, these companies have abused their positions of dominance to the detriment of their loyal customers by needlessly overcharging in the form of loyalty penalties. I look forward to seeking justice on behalf of the several million mobile handset customers who have ever entered into a Combined Handset and Airtime Contract and been wrongfully overcharged as a result”
Justin Gutmann
Mr Gutmann alleges that the UK mobile network operators have used their position in the UK retail market for mobile telecommunications services to impose overpayments (“Loyalty Penalties”) on customers who did not immediately terminate their contracts for a handset and airtime services (a “Combined Handset and Airtime Contract”) at the end of the minimum contract term (“Minimum Term”).
A Combined Handset and Airtime Contract is a contract whereby an individual purchases a mobile telephone (“Handset”) and agrees to make regular payments calculated to cover the cost of the Handset and other services such as text messages, calls and data (“Airtime Services”) over a Minimum Term.
During the Minimum Term of a Combined Handset and Airtime Contract, the individual must continue to make regular monthly payments unless they choose to terminate the contract by paying an early termination fee.
At the end of the Minimum Term, if the customer does not cancel the Combined Handset and Airtime Contract, they will continue to make regular payments at the prevailing rate, even though the Minimum Term has expired, and the Handset is fully paid for. As a result, individuals who do not terminate their Combined Handset and Airtime Contract immediately at the end of the Minimum Term will overpay for the Airtime Services, as their monthly charges will not have been reduced to the relevant SIM-only price despite the Handset having already been paid for over the Minimum Term.
Breaking Ground
Mr Gutmann alleges that the UK mobile network operators have used their position in the UK retail market for mobile telecommunications services to impose overpayments (“Loyalty Penalties”) on customers who did not immediately terminate their contracts for a handset and airtime services (a “Combined Handset and Airtime Contract”) at the end of the minimum contract term (“Minimum Term”).
Progress of Claim
On 14 November 2025, the Competition Appeal Tribunal certified Justin Gutmann’s collective proceedings claims against the UK’s mobile network operators and the claims may now proceed to trial. In the judgment, the Tribunal was clearly satisfied with Mr Justin Gutmann’s suitability to act as the Class Representative in the proceedings.
Those who are interested in finding out more about the claim and signing up for regular updates should visit Home | Loyalty Penalty Claim.