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Mobile Phone Debt
Stop creditor action and consolidate all of your debts into one monthly affordable payment – from £70 per month
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What happens when you can’t afford to pay your phone bill?

We all rely on mobile services to communicate, they keep us connected and entertained. Many of us rely on them for our jobs and income such as digital marketers and social media managers. Many people also run their businesses with their mobile phones. 

However, it can be quite easy to build up mobile debt. Sometimes this can be down to not understanding the terms of the contract or how much calls and text messages actually cost. It can become easy for some to lose track of how much they’re using their mobile phone.

When you sign up for a mobile phone contract, you agree to a minimum contract length. This is usually 12, 18, or 24 months. If your situation changes during the duration of the mobile phone contract, you might not be able to afford to pay your mobile phone debt.

This could happen If your income drops during the contract term or your living costs go up. You might also struggle because of a one-off bill that you weren’t expecting, or because the phone contract you signed wasn’t as affordable as you thought, or included hidden extras.

What happens if I don’t pay my mobile phone bill?

If you don’t pay your mobile phone contract, your account will go into arrears. Your mobile provider could cut your phone off so you’re unable to make or receive calls.

If you don’t take steps to deal with the mobile phone debt, your account will default and the contract will be cancelled. The mobile provider can then take action to recover the outstanding bill, following the normal debt collection process.

Mobile phone bill arrears should be treated as a priority debt, as mobile phone companies can take the following steps to recover the money owed to them:  
  • Disconnecting the mobile phone
  • Passing on the debt to a third party debt collection agency
  • Issuing a County Court judgment
  • Applying for your bankruptcy, if the amount exceeds £5,000 (applies to England, Wales and Northern Ireland only)

Mobile phones and the Consumer Credit Act

Some mobile phone companies ask their customers to sign two agreements. It’s important to understand which is which, as it’ll affect how the phone company will deal with your debt.  
  1. If you’ve signed a contract covering the minutes, text and data usage, any debt is not covered by the Consumer Credit Act
  2. If you’ve signed a contract for the sale or loan of the device this is regulated by the Consumer Credit Act

How to get help from your provider

Contact your mobile phone provider and ask what they can do to help. For example, they might agree to help you by:

  • Giving you a payment plan
  • Reducing your bill
  • Giving you more time to pay
  • Increasing your data or download limit
  • Moving you to a contract that suits your needs better

If you arrange a payment plan with your provider

Your payment plan should include:

  •  An amount for what you currently use – this might be an estimate 
  • An amount that will go towards paying back what you owe

 

Your provider might charge you a fee if you miss a payment or pay late – you should contact your provider if you think you’ll miss a payment. 

If you can’t pay your bill because of coronavirus

The government have announced you should get extra help if you’re a customer of:  
  • BT
  • EE
  • Openreach
  • Virgin Media
  • Sky
  • TalkTalk
  • O2
  • Vodafone
  • Three
  • Hyperoptic
  • Gigaclear
  • KCOM

​​When will a Debt Collection Agency get involved?

It’s common for a debt collection agency to get involved quickly when it comes to mobile phone debt. Fortunately, bailiffs won’t appear immediately without notice and you’ll receive a warning before they’re due to arrive.

Alternatively, it’s also common for mobile phone companies to seek repayment through actions such as a County Court Judgement. In extreme cases, they might also apply to make you bankrupt.

What can I do if my phone bill is too expensive?

When agreeing to a phone contract, there are several aspects that you might not have considered at the time. From premium rate services to abroad charges, this might have led to bills which you just weren’t expecting.

Fortunately, you might be able to reduce the cost of your bill by:

Contacting your provider

By contacting your phone provider, you may be able to negotiate a change in payments. Potentially, you could make smaller repayments in exchange for lengthening the contract.

If necessary, switching your provider

If your current contract is coming to an end but was too expensive, you might be able to switch to a competitor in exchange for a reduced rate.

Putting a cap on your allowances

You can speak to your phone provider and request they implement a cap on your phone, text, and mobile data downloads. This ensures you won’t go over your usage limits and won’t lead to any surprises next time your bill is due.

Need help with your mobile phone debt?

Staying connected is more important now than ever, so it’s natural to be worried and upset if you’re struggling to pay your phone bill. Every provider is different in the support they’re able to provide, so contact them to discuss your options if you can’t afford to pay your bill. If you are worried about your phone debt and other debt problems you may have then contact IVA Advice for free debt advice.

I really can’t afford to pay, what can I do?

Going over your inclusive allowance for calls, texts or data, or using premium rate services and your phone abroad, can lead to unexpected bills that you may not be able to afford. You may also have previously missed payments which you’d agreed to catch up with. Here’s what to do if you really cant afford to pay off your mobile phone debt.

Speak to your network provider about the arrears

Most providers already have support in place for customers who are struggling to pay their bills. This may include:
  • Changing your bill date to a more affordable date
  • Moving from ‘pay monthly’ to pay-as-you-go
  • Staying on ‘pay monthly’ but moving you onto a lower tariff
  • Delaying payments for a period of time depending on your circumstances
 

Review your allowances or tariff

Make sure your contract covers your usage for texting, calling and mobile data downloads. Sometimes the network provider can cap your allowances so that you don’t go over your usage limits, helping you lower future bills.

Get free debt advice

If you are worried about your phone debt and other debt problems you may have, then contact a debt advisor, they will look at your financial situation and assess what is the best course of action for you. What you discuss with a debt advisor will be kept confidential. Call IVA Advice today for free debt advice.

How can I pay less for my mobile phone contract?

There are a number of ways to spend less on your mobile phone bill, which can help when you’re dealing with arrears:
  • Tell your mobile phone provider you’re going to leave because you can get a better deal elsewhere. This invites them to negotiate with you
  • Cancel any unnecessary mobile contracts or allowances you’re not using
  • Use comparison websites to search for the best deals
  • Use free services wherever possible, such as Skype and WhatsApp (making allowance for the use of data or wifi)
  • If you’re regularly going over your data limit, use wifi (including free wifi in public spaces) to use services where data is downloaded
Mobile phone contracts can seem like an easy way to get the latest phone and spread the costs, but you can end up paying more in the long term. There are alternatives that could work out cheaper and ways to save money on your current contract to help prevent you from falling into debt in the future.

SIM-only deals

These offer a package of minutes, texts and mobile data and are similar to traditional mobile contracts. The difference is that you don’t get a phone included in the contract. This can work out cheaper as you’re not paying a high cost for a phone, and you can buy one separately or use one you already have. There’s also usually a lower minimum contract term such as 30 days, so you can cancel more easily if you want to.

Pay-as-you-go

This lets you buy credit in advance and only pay for what you use. There are no long contracts to worry about and you can switch providers at any time. You’ll need to buy or use a phone separately as you’re only paying for the minutes, texts and data you use.

When will a Debt Collection Agency get involved?

It’s common for a debt collection agency to get involved quickly when it comes to mobile phone debt. Fortunately, bailiffs won’t appear immediately without notice and you’ll receive a warning before they’re due to arrive.

Alternatively, it’s also common for mobile phone companies to seek repayment through actions such as a County Court Judgement. In extreme cases, they might also apply to make you bankrupt.

I don’t think my mobile phone bill is fair, what can I do?

If you think you’ve been charged incorrectly, speak to your mobile phone provider. Ask them to check your tariff and explain any extra charges that have been included.

Mobile phone companies are governed by the communications watchdog, Ofcom. If your complaint isn’t resolved by speaking to your mobile phone provider you can send a written complaint to them. It’s worth including evidence to back up your reason for disputing the bill.

If your complaint isn’t resolved, you can refer the phone company to Ofcom.

Get free debt advice today

If you are struggling to pay off a mobile phone debt then you can get free debt advice from IVA Advice. While many people may be wary of asking for help, it’s important to take responsibility for your situation. We will offer you a plan that deals with all aspects of your financial situation, including debt advice. If you feel like there’s nothing you can do to deal with your debts, and you want debt advice on writing them off and doing monthly payments, then contact IVA Advice. We can help you with a debt solution, debt management plans or IVA proposal. We’ll help you to prepare a budget and work out what options there are to deal with your debts. Call IVA Advice and chat with us, so we can understand the best way to help you.