Martin Lewis warns O2 customers over ‘confusing’ contract charges after surprise price hikes

The Money Saving Expert founder said O2’s communication is misleading some customers into believing they must immediately pay off their entire handset balance if they want to switch providers.

Mr Lewis said the issue has prompted him to contact government officials to demand clarity and stronger consumer protection.

One Reddit user shared a text from O2 stating they would need to pay £2,347.46 to leave the network as of 5 November 2025.

The message said this figure covered the remaining device plan balance, along with any Apple Watch payments, airtime usage and additional charges such as Charge to Mobile services.

For those on cheaper monthly plans, the price increase could represent as much as a 30 per cent rise in their bills.

Many customers who have attempted to cancel after receiving notice of the price change say they were quoted substantial sums to clear handset costs.

This has left some feeling trapped between accepting higher monthly charges or paying large lump sums to leave.

Mr Lewis took to X, formerly Twitter, on Thursday to clarify the situation for confused customers.

He warned: “Beware unclear O2 messaging!” and explained that while customers have the right to leave penalty-free within 30 days of being notified about the airtime price increase, O2’s statement about needing to pay off device plans “in full” does not mean they must do so immediately.

“That DOESN’T mean you have to pay it all now,” he wrote. “You can keep paying for the handset monthly, but move your SIM (ie airtime plan) elsewhere.”

This means customers can continue their existing device payments while switching their mobile service to another provider — avoiding the large upfront costs O2’s message appears to imply.

O2 provided this message to its customers: "If you do decide to cancel, you’ll still need to pay your device plan. You can continue paying monthly, or you can pay the remaining balance in full. If you choose to pay the full balance, you’ll need to call us on 202 to arrange it."

New Ofcom regulations introduced in January were designed to protect consumers from unpredictable price rises.

The rules prevent mobile networks from linking price increases to inflation during a contract, requiring them instead to specify exact amounts in pounds and pence when customers sign up.

However, a loophole remains that allows firms to increase prices beyond their original terms, provided they give 30 days’ notice and the right to cancel.

This means that despite tighter regulation, customers may still face unexpected increases that go beyond what they were originally told.

Mr Lewis has written an open letter to Chancellor Rachel Reeves urging the Government to strengthen the rules and close this gap in protection.

In his letter, published through MoneySavingExpert, he warned: “Without an improvement in protection, it is now possible, or even likely, more firms across all sectors will follow O2’s new method, which could add up to hundreds of pounds for households, making the cost-of-living crisis worse and fuelling inflation.”

He pledged to continue encouraging O2 customers to switch providers.

Mr Lewis added: “While all impacted mobile customers can leave penalty-free, and many should, most will likely just have to accept a rise that was more than they were told when they signed up. This particularly hits older and more vulnerable people who are less likely to switch.”

An O2 spokesperson said: “As acknowledged by Ofcom in its letter to providers last week, its rules do not prevent companies from increasing annual price changes – for example, to invest in improving networks for customers.

"A price increase equivalent to 8p per day is greatly outweighed by the £700m we invest each year into our mobile network.

“We appreciate that price changes are never welcome, but we have been fully transparent with our customers about this change, writing directly to them and providing the right to exit without penalty if they wish.

"As explained directly to customers when we informed them of this change, if they decide to leave, they will continue to pay their device plan monthly by default, or alternatively they can contact us to arrange paying in one go if they wish.”