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Debt problems rocketing from smartphone bills 18 April 2012

An explosion of consumers in debt from mobile phone bills has led to an overwhelming number of calls to the National Debtline over the past three months.

Data released today from the national charity shows there were 14,651 calls last year relating to telephone debts, compared to just 5,830 in 2007.

The charity said that last year’s calls represented 7.4% of all calls compared to the 2007 figure which represented just 3.9% of concerns.

Joanna Elson, chief executive of the Money Advice Trust, said smart phones have had a massive impact on society over the past few years.

She added: “One often overlooked consequence is that we’re all paying far more for mobile phone contracts than we were five years ago. This in turn means more people struggling to meet phone contract payments, and finding themselves with a debt problem.

“When you take out an expensive contract for a smart phone you are in effect taking out a loan to pay for the handset.

“Smartphones are sold without contracts for upwards of £500, which would prohibit many from getting hold of one, but with a contract the upfront fee all but disappears, to be replaced by a monthly cost incorporating much of the phone’s usage costs as well.

“When people fall foul of that monthly fee, they can find themselves with a growing debt problem. The figures from National Debtline suggest this is happening more often in line with more and more people taking out expensive smart phone contracts.”

In the first three months of this year the problem has further accelerated, as the service has received over 4,000 calls for help with telephone debts. The charity pin pointed expensive smart phone contracts as a potential cause of the problem.

 

 

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