Consumer champion Justin Gutmann's 'Loyalty Penalty' Class Action claim against UK's largest mobile operators certified by UK Competition Appeal Tribunal

The more than £1.1bn plus opt-out claim alleges that the companies used their market dominance to overcharge on up to 10.9 million UK mobile phone contracts.

The class action is the first to target the Major Network Operators' (i.e. Vodafone, EE/BT, Three, and O2) practice of charging "loyalty penalties" -  charging existing customers more than new customers for the same services.

LONDON, Dec. 1, 2025 /PRNewswire/ -- Consumer rights champion Justin Gutmann and the law firm Charles Lyndon have announced that class action proceedings launched against Vodafone, EE, Three, and O2 (the "Loyalty Penalty Claim") have now been certified by the Competition Appeal Tribunal (CAT). The claims will now proceed to trial with Mr. Gutmann serving as the Class Representative.

The Loyalty Penalty Claim alleges the companies have been abusing their dominant positions in the UK mobile industry by charging a 'loyalty penalty,' in which long standing customers were overcharged for handsets beyond the end of their contractual term. In a judgment issued November 14, 2025, the CAT declared itself "satisfied that the Eligibility and Authorisation conditions are met" and that it "grants the proposed class representative's (Collective Proceedings Order) in the Vodafone, EE, Three, and O2 proceedings".

Mr Gutmann alleges the mobile operators have overcharged on more than 10.9 million contracts - covering a period from October 1, 2015 to March 31, 2025 - and, as a result, is seeking damages of at least £1.141 billion. If successful, a claimant could receive as much as £104 for every contract they took out with any of the mobile operators and paid a "loyalty penalty". Many consumers are expected to have claims against more than one mobile operator.

The Loyalty Penalty Claim is being brought on behalf of consumers who have purchased mobile contracts made up of a mobile phone and airtime services such as data, minutes and calls. When these contracts are agreed, their price during the minimum term of the contract includes both the mobile and the use of airtime services.

The Loyalty Penalty Claim alleges that the mobile network operators failed to reduce the amount charged once the minimum contractual term expired, despite the fact that consumers had already paid for their mobiles. This resulted in existing customers being charged more than a new customer would be if they were just paying for airtime services.

A typical example would be someone who agreed a two-year contract combined contract for a mobile phone and a SIM airtime services deal, paid off their mobile phone during the course of their contract, but then continued to be charged the same amount once the minimum contract term had expired, resulting in them paying far more than they would if they were a new customer on a SIM only deal.

Most customers of these mobile network operators who made payments after the expiry of their contractual minimum term are included in the Loyalty Penalty Claim, which is being conducted on an "opt-out" basis. This means that the claim is brought on behalf of a defined group of people, but those people do not have to be personally identified. All qualifying consumers will be automatically included in the Claim for free unless they follow specific steps to opt out. Mr Gutmann is encouraging consumers to visit the dedicated Loyalty Penalty Claim website (www.loyaltypenaltyclaim.com) so they can be kept updated on the progress of the now-certified claim.

The Loyalty Penalty Claim follows a rare super-complaint from Citizens Advice to the Competition and Markets Authority ("CMA") in September 2018. The CMA found that: "We do not consider that providers should continue to charge customers the same rate once they have effectively paid off their handsets at the end of the minimum contract period. This is unfair and must be stopped." They also added that customers "rightly feel ripped off, let down and frustrated".

Justin Gutmann said: "For far too long the phone companies have been taking advantage of their loyal customers. That's why it's time to stop the immoral practice of loyalty penalties. Now that we have approval to proceed with our Loyalty Penalty Claim, I look forward to bringing the claim to court and putting money back into the pockets of those consumers who need it to help ease cost pressures in their family budgets."

To learn more or to opt-out of the Loyalty Penalty Claim, please visit  www.LoyaltyPenaltyClaim.com or contact Trafalgar Strategy on 02070431308 or loyaltypenaltyclaim@trafalgar-strategy.co.uk 

ABOUT JUSTIN GUTMANN:
Justin Gutmann is the former Head of Research and Insight at the UK's statutory consumer champion Citizens Advice. He is still committed to representing consumers and protecting their rights. He has also been authorised by the Competition Appeal Tribunal as class representative to represent rail users who he believes have been overcharged by a number of rail companies, and secured a £25 million settlement.