Five ways to save money and untie yourself from unnecessary fees

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MILLIONS of mobile customers could be in line for payouts of up to £1,823 each if a bold new legal claim succeeds.

Up to five million phone users were hit with a so-called "loyalty penalty" and ripped off by more than £3billion across 28million mobile contracts, according to the man behind the class action.

But the case could take years to unfold and customers might not get a penny if it fails.

Here are five ways you can break free from unnecessary fees and save £1,454 a year.

MOBILE – SAVE £335

STICKING with a mobile provider when you’ve paid off your handset could cost £335 a year, according to comparison site Uswitch.

Find out whether you’re free to leave or if there’s an exit fee to pay by texting INFO to 85075.

Then, if your current phone still works fine, use the cheap mobile deal finder on MoneySavingExpert (MSE) to pick a better tariff.

Lebara has a sim-only deal at £1.99 per month for the first six months, rising to £4.99 thereafter. You get unlimited minutes and texts, plus 5GB of data a month.

Or if you do need a handset you can also find the best price for new or refurbished phones at MSE.

BROADBAND – SAVE £227

BROADBAND customers who don’t shop around are spending up to £227 more than necessary, comparison site Broadband Genie found.

Use sites like Broadband Genie, MoneySuperMarket or Uswitch to find a better deal. Be sure to check speed and download limits.

Four million people on Universal Credit and other benefits could qualify for cheaper social broadband tariffs, but are missing out.

Costs start at just £12 a month but only around 220,000 are signed up for these savings, says Ofcom.

CAR COVER – SAVE £516

DESPITE a clampdown by the regulator on insurers charging loyal customers more than new ones, many drivers are still overpaying.

Use a comparison site like Compare The Market or MSE to bring down your bills. Research by Compare The Market found drivers could save £516 by switching insurers on the site. Adding an additional named driver or tweaking your job title can sometimes bring savings, so long as it’s not stretching the truth.

HOME INSURANCE – SAVE £176

HOMEOWNERS could save up to £176 a year by switching their building and contents insurance, Compare The Market found.

If you need both, a joint buildings and contents policy often works out cheaper.

Millions of customers cancelled or cut back their cover in the year to May, according to the financial watchdog. In the run-up to Christmas when cold weather can cause pipes to freeze and leak, it’s more important than ever to check you’re covered.

BANK ACCOUNT – SAVE £200

IF you’ve been with the same bank for years, the chances are you’re earning pennies in interest on any cash you hold there.

But you could get a cash bonus just by moving your current account and you’ll probably get a better interest rate too.

Nationwide is offering new current account customers £200 and First Direct pays a £175 bonus.

Apply to switch to your chosen bank and all your direct debits will be automatically moved over.

WHAT CASE MEANS FOR YOU

EXPERTS warn the recent class action suit against some of the country’s biggest mobile networks for allegedly penalising loyal customers will likely take years and could go either way.

Here James Flanders explains what the legal battle means for you…

WHAT’S THE CLAIM?

FORMER Citizens Advice executive Justin Gutmann is arguing that EE, O2, Vodafone and Three should compensate millions of customers who he believes were overcharged.

He reckons that customers who had a single contract with one provider could get up to £1,823 after legal fees – and customers who had multiple contracts could get even more.

Mr Gutmann, and law firm Charles Lyndon, are making the claim on behalf of all the customers they think have paid too much.

He alleges that these customers suffered a "loyalty penalty" because their bills didn’t reduce at the end of their minimum contract, despite the fact they had already paid for their mobiles.

Mr Gutmann believes that anyone who took one of these deals with the named firms since 2007 would be due money if the claim succeeds.

HOW DO I TAKE PART?

IT’S what is known as a class action and you don’t have to do anything right now. Everyone affected will be part of the case unless they specifically ask to opt out.

Only if Mr Gutmann were to win the claim, would customers need to come forward to claim their share of the money.

You can keep track of how the case progresses at loyaltypenaltyclaim.com, but the site warns that "disputes of this size generally take years to resolve".

IS IT LIKELY TO SUCCEED?

CONSUMER rights expert James Daley of campaign group Fairer Finance believes it’s 50/50.

He said: "It’s hard to say whether the case will stack up from a legal perspective.

"At the end of their contract, consumers are free to switch, and although the big networks have clearly taken advantage of their customers, there has generally been a competitive market available for those who have taken the time to shop around.

"That said, if the claim is successful, we could see similar claims launched in a whole raft of sectors – from broadband to energy and savings."

WHAT DO THE FIRMS SAY?

O2 said: "We’re proud to have been the first provider to have launched split contracts a decade ago which automatically and fully reduce customers’ bills once they’ve paid off their handset."

The case had only recently been brought to Vodafone’s attention and it did not yet have sufficient detail for its legal team to assess.

An EE spokesperson said the firm has a "robust process for dealing with end-of-contract notifications" and added: "We strongly disagree with the speculative claim being brought against us."

Three declined to comment.