Consumer rights advice services and experts are now urging mobile networks to issue refunds to customers - but not everyone is guaranteed a refund.
Overcharged after contracts end
Citizens Advice estimated that in 2018, four million people in the UK were charged £490 million for handsets that they already owned.
In 2017, the charity also found that providers are overcharging customers by up to £450 a year after they have paid off their handset.
Am I owed a refund?
As they technically haven’t broken any rules, network providers are not legally required to issue refunds to customers who have been overcharged.
However, Martyn James, from online complaints tool Resolver, recommends customers go through their old bills if you fear they may have been overcharged, before explaining to their provider that they would have switched to a cheaper deal if they had known.
Mr James told The Sun: "If people have been overcharged, they should be refunded.
"Ofcom’s new rules will undoubtedly make things better for millions, who might have been overcharged in the future.
"But that still leaves the millions who have already been overcharged."
"In the insurance industry, the Financial Ombudsman has upheld a number of cases where customers have been overcharged on their bills.
"In principle, that applies to other sectors too."
New guidelines coming into force
New guidelines are set to come into place next month, which means that more than 1.4 million out of contract users will be switched automatically from their standard variable rate, to cheaper sim-only tariffs.
Ofcom has said that this new move will save 1.4 million customers an average of £74 a year - which works out as £11 a month.
Some of the major mobile providers have now said what they will do for out-of-contract mobile users.
EE and Vodafone have both said that they will reduce their prices for customers out of contract for more than three months.
Meanwhile, O2 will reduce the monthly price for its out-of-contract customers to the equivalent price of the 30-day sim-only deal.
However, this will only apply to its direct customers, but O2 are set to discuss options for customers who take out O2 contracts with third-party retailers.
Virgin Mobile have said they will move their out-of-contract customers to the equivalent 30-day sim-only deal.