The issue stems from confusion over what customers owe when leaving the mobile provider. While O2 claims to have communicated clearly, Lewis argues that many are being misled into paying full handset costs unnecessarily. For some, the resulting charges have reached several hundred pounds.
Price Hike Prompts Wave of Exits and Billing Confusion
In early 2023, O2 imposed mid-contract price hikes affecting up to 15.6 million customers, increasing some charges from £1.80 to £2.50 per month. The company stated the changes were in line with terms and conditions and allowed customers to leave their contracts penalty-free. However, according to Lewis, “muddled messaging” has caused widespread misunderstanding about how this exit process should work.
Speaking on ITV’s The Martin Lewis Money Show Live, he said: “Did you ditch 02? I’ve talked about it a lot on this show because I was annoyed about it after it hiked its price. If so, check your final bill hasn’t got hundreds of pounds extra added to it.” He noted that many viewers had contacted him claiming they were being charged exit fees or asked to repay their device plans in full, charges they may not legally owe.
According to O2, customers were informed of their right to cancel, and the operator insists it complied with Ofcom regulations. A company spokesperson said: “We have been fully transparent about this change, which equates to an extra 2p a day, writing directly to customers and providing the right to exit without penalty if they wish, in line with existing rules.”
Nonetheless, the distinction between cancelling airtime (SIM) contracts and continuing handset payments appears to have been misunderstood by some. Lewis clarified that customers could continue to pay off their devices in instalments and only needed to end their SIM agreement if they wished to leave.
Potential Impact on Credit Scores and Recommended Next Steps
Aside from the immediate financial cost, there are broader implications for those affected. Lewis warned that wrongful charges could lead to negative entries on credit reports, which might in turn damage a customer’s ability to apply for loans or mortgages.
The financial expert urged anyone who has recently cancelled with O2 to take several steps:
- Check all correspondence from the company (letters, emails, or SMS) for any mention of handset repayment terms
- Review final bills and bank statements for unexpected lump-sum payments or cancellation fees
- Inspect credit reports for signs of incorrect defaults or missed payments
If customers believe they’ve been wrongly charged, Lewis advises filing a formal complaint with O2 first. If unresolved, the matter can be escalated to the Communications Ombudsman, which handles disputes between telecom companies and consumers.
He emphasised the seriousness of the issue, stating on air: “Some people are getting in touch with me directly say they’ve been charged to cancel or asked to repay handsets costs up front. That is wrong. If so, complain to O2. Then, if there’s no resolution. Go to the communications ombudsman.”
Lewis also noted this could become “one of the biggest causes of complaint” in his inbox this year, signalling the scale of potential confusion.
This situation highlights the complexity many face when dealing with mobile contracts, especially when terms change mid-agreement. While O2 maintains its position on transparency, the rising number of complaints suggests a disconnect between company policy and customer understanding. For current or former O2 users, the advice remains simple: read the fine print, and check your bills now.
