Mobile and broadband companies are not being upfront about better renewal deals that could save consumers £325 a year, Citizens Advice has said.
The charity found that instead of automatically offering existing customers their most competitive price, providers were penalising consumers, with three million people paying over the odds for their contracts.
On average, people who call and negotiate money off their bills can save more than £325 a year combined for mobile and broadband bills.
As a result, the charity estimates loyal consumers who do not negotiate are losing out on a collective £28 million in savings every month.
The advisory service said its findings “unearth the murky practice” of only making better deals and discounts available after persistent efforts from customers.
This included people being forced to hunt through confusing online options, call up and negotiate or even threaten to switch to a new provider.
However, almost one in five people (18%) do not negotiate or switch.
When fixed-term contracts come to an end, consumers can accept what their current provider offers, negotiate a better deal or switch to a new provider.
While switching can save money, it can take time and involve setting up new equipment.
Consumers mostly choose to negotiate, but Citizens Advice found a lack of transparency on fair pricing.
It found that 78% of those who negotiate on the phone found at least one of the steps difficult, including navigating confusing call centre menus to get through to the right person (43%) and waiting on hold (55%).
Two in three people (66%) who negotiated on the phone experienced at least one negative consequence such as feeling like they had wasted their time (39%) or feeling stressed (37%).
The charity is calling on Ofcom to make telecom pricing fully transparent.
Citizens Advice chief executive Dame Clare Moriarty said: “For too long, mobile and broadband providers have forced consumers to go through the charade of pretending to leave in order to access hidden renewal deals.
“Millions of people are still paying over the odds for something as essential as mobile and broadband because of this murky practice.
“Ofcom has taken some welcome steps to strengthen protections for consumers, but this loophole needs to be closed.
“We want to see Ofcom clamp down on long overdue transparency on pricing, closing the gap between what deals are on the table and what’s kept under the counter.”
An Ofcom spokesman said: “We’ve made it easier to get a discount and save money, whether that’s by haggling with your existing provider or moving to a new one.
“Phone and broadband companies must tell you when your contract’s ending and what you could save by signing up to a new deal. Our rules also mean it’s never been simpler to switch, and millions of customers have taken advantage of the competitive market we have in the UK.”
Opinium surveyed 6,000 UK adults between April 22 and June 6.
