UK mobile phone customers are collectively overpaying £5.4bn to mobile phone firms annually because they are on the wrong contract for their requirements, it has been claimed.
The consumer group Which? said firms must improve contract pricing transparency or risk being referred to the industry regulator, Ofcom.
It said customers are being charged for texts, minutes and data they do not use or are billed for extra charges because their phone package is too small.
The consumer group found 72% of mobile customers could save an average of £159 a year by switching to a contract which better suited their needs, while 77% could save at least £50 a year.
Which? executive director Richard Lloyd said: "It's shocking that consumers are overpaying by billions of pounds for mobile phone contracts that just don't suit their needs.
"Mobile phone companies must do more to help people get the best deal, making switching hassle-free and ensuring that pricing is transparent."
Research for Ofcom showed that 48% of mobile customers have never switched supplier.
A Which? poll for its Unlock Better Mobile Deals campaign found just 28% of people trust mobile phone services.
It wants providers to take voluntary action by unlocking handsets automatically for free, allowing customers greater control over their tariff.
The consumer group also suggests that companies should notify customers at least a month before the end of their contract and provide information on the best deals, with the monthly cost of the handset separated from the service charge.
Which? said some providers were already simplifying the billing and switching process but customers should shop around to ensure they get the best deals for them.
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