UK’s competition watchdog has proposed a crackdown on companies that charge so-called loyalty penalties on a whole range of products including mortgages, insurance and mobile phones, which cost consumers around £4bn a year.
Millions of people are affected by the ‘loyalty penalty’, we’ve set out our findings and recommendations in our response to the super complaint from @CitizensAdvice. https://t.co/gbS5VWj5yf pic.twitter.com/LCxnM6BhIt
— Competition & Markets Authority (@CMAgovUK) December 19, 2018
The Competition and Markets Authority’s (CMA) action follows a “super-complaint” in September from consumer body Citizens Advice stating that companies penalise existing customers by charging them higher prices than new customers.
“Our work has uncovered a range of problems which leave people feeling ripped off, let down and frustrated,” said Andrea Coscelli, the CMA’s chief executive. “They shouldn’t have to be constantly “on guard,” spending hours searching for or negotiating a good deal, to avoid being trapped into bad value contracts or falling victim to stealth price rises.”
The watchdog also found year-on-year stealth price rises, costly exit fees and complex processes to cancel contracts. It
The CMA found that vulnerable people, including the elderly and those on a low incomes, were more at risk of paying loyalty penalties.