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CAB launches super-complaint into penalising loyal customers

Citizen’s Advice Bureau calls for penalising loyal consumers to stop

CAB press release

Citizen’s Advice Bureau has today launched a super-complaint with the Competition and Markets Authority (CMA). It is calling for the regulator to look into how consumers are being penalised for loyalty in 5 key sectors. It requests an outline from the CMA on how the problem can be fixed.

CAB’s press release said:

“Citizens Advice has revealed customers who stay loyal to their providers are losing out on over £4 billion a year.

The practice of overcharging loyal customers is widespread and Citizens Advice has repeatedly warned that loyal consumers are being ripped off.

Research by Citizens Advice found that across 5 essential markets (mobile, broadband, home insurance, mortgages and savings):

British consumers lose £4.1 billion a year to the loyalty penalty.

8 in 10 people are paying a significantly higher price, in at least one of the markets, for remaining with their existing supplier.

The loyalty penalty is, on average, £877 per year – equal to 3% of the average household’s total annual expenditure.”


Back in May of this year, the ABI (Association of British Insurers) and BIBA (British Insurance Brokers’ Association) launched a set of Guiding Principles and Action Points  The ABI and BIBA has said it wants its insurance industry members to provide all the information about switching in their correspondence to customers.

Graeme Trudgill, Executive Director said “This guidance was a massive step forward in addressing any large discrepancies in premiums between new business and renewal and was put in place after the CA survey was done which informed their report.

In addition the FCA requirement to advise customers that have been with the same provider for several years that other providers are available – their ‘increasing transparency and renewal in general insurance markets’ – launched mid 2017 and may not have been reflected in the research.

“Though some customers may be able to obtain lower premiums it is important to en sure that the cover they have is suitable. Our members, insurance brokers most often do not set premiums and are able to help customers with the ‘shopping around ‘ at renewal. Since the launch of the principles and action points we’ve been highlighting to members the importance of double checking that customers who have been with the same insurer for a while are being offered a fair premium and we will continue to push this message hard with our members.”

The Financial Conduct Authority

The Financial Conduct Authority (FCA) has added its support. In a press release it stated:

“The FCA has been concerned about the issue of long-standing customers being charged more for some financial products than new customers for some time. This has informed our earlier work on cash savings and mortgages.

In the FCA’s 2018/2019 Business Plan we announced that we were looking at the pricing practices of general insurance firms. As part of that work we will launch a market study looking at how general insurance firms charge their customers for home and motor insurance. The terms of reference for this market study will be published in a few weeks’ time.”

Update 22/09/20 The FCA sets out proposals to tackle concerns about general insurance pricing

Government stance on loyal consumers

To coincide with the super-complaint The Department for Business, Energy and Industrial Strategy (BEIS) launched a review of Smart data to protect consumers from rip-off tariffs to look at how the use of technology, such as comparison tools and open banking, can support consumers. It will also cover the speeding up of creative and innovative approaches.

Consumer Minister Kelly Tolhurst said:

“Britain has long been a world leader in ensuring that markets work in the interests of consumers, but many loyal customers are still paying more than they need to.

The Smart Data Review will enable the development of new technologies to make it easier to access the best deals, and follows tough action we have taken in the energy market through our price cap which will protect over 11 million households from poor value default tariffs this winter.

It is our modern Industrial Strategy in action, ensuring markets provide consumers with keen prices and quality products and services through cutting-edge innovation.”

The Government has said it “… wants to ensure that all consumers can benefit from these types of innovative new services, not just those who are digitally savvy and regularly look to switch providers.” But if the review is to only look at technology, one wonders how.

The importance of switching energy suppliers and telecom providers on ITV News

In previous research, CAB found that it is the most vulnerable who are hit by these penalties. It’s exploitation of vulnerable consumers plain and simple.

Let’s hope things are moving in the right direction, and fast!

Help and resources in saving money when renewing cover

All you need to know about complaining to telecom providers

All you need to know to make a complaint about energy

How to save money on your car insurance

Top 20 tips for complaining effectively

If you don’t get satisfaction from customer services write to the CEO. You can find their contact details on the CEO email website. You are unlikely to get a personal response but it will escalate matters.

book Logo cartoon cow at a laptop of book cover. How to Complain: The Essential Consumer Guide to Getting Refunds, Redress and Results!


For lots of help, advice, consumer laws and template letters for complaining about most issues in most sectors GET THE BOOK! How To Complain: The ESSENTIAL Consumer Guide to Getting REFUNDS, Redress and RESULTS!

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Putting an End to Misleading Prices Guest Post by Which?

Regular followers of this blog will know that I bang on about supermarkets a lot! See my many posts and communications with Tesco, last and current CEOs in History with Tesco, commenting on the radio about supermarket figures  and researching, writing and speaking about supermarkets most annoying habits in the media. In the latter, many complaints were about pricing. So I asked Which? to provide an update on their super complaint.

Putting an End to Misleading Prices 

Pete Moorey, Head of Campaigns at Which?
Pete Moorey, Head of Campaigns at Which?

For the past eight years Which? has time and time again found misleading pricing practices being used by supermarkets.

With £115bn spent on groceries and toiletries in 2013 alone, and 40% of groceries (by revenue) currently sold on promotion, dodgy deals could be costing British consumers hundreds of millions of pounds each year.

After raising the issue with industry only to receive a lack-lustre response we decided enough was enough and made use of our super-complaint powers.

The power to make a super-complaint is only held by a handful of organisations. Its purpose is to allow bodies to submit a complaint on any feature, or combination of features, of a market in the UK for goods or services which are, or appears to be significantly harming the interests of consumers.

Which? submitted a super-complaint on supermarket misleading pricing practices to the Competition and Markets Authority (CMA) in April 2015. The complaint relayed our findings, evidence and concerns about the shrinking products, misleading special offers and dodgy multibuys offer we had found lining supermarket shelves across the UK.

On the submission of the super-complaint the CMA had 90 days to respond and make any recommendations if they believed there was a problem.

During those 90 days we were overwhelmed by the response of consumers. Many got in touch to tell us about the dodgy deals they had experienced whilst doing their shopping and 200,000 people signed our petition (you can still sign and support) to put an end to the misleading pricing practices.

But of course, whilst consumers were fed up with the dodgy deals and were making their voice heard, the outcome hung on the CMA. After weighing up the evidence, and finding hundreds of dodgy offers themselves, the CMA’s responded saying that there is a problem and that it did needs solving, a real win for consumers.

In a move which sent a strong message to supermarkets, the CMA announced a raft of positive recommendations to deal with several of the issues we had found.

In a nutshell these recommendations look to strengthen the guidelines around special offers, make unit pricing clearer so consumers can make informed decisions and tighten the pricing rules in general.

Several of these recommendations need to be implemented by Government who have since come out in support of the findings.

Consumer Minister Nick Boles welcomed the findings saying:
‘Shoppers need to be able to get the best deal and make comparisons easily so we will look at how we can make information on price as clear and as simple as possible.’

This is real progress, but Which? will be keeping a close eye to ensure tangible and positive changes are delivered by government and the CMA meaning consumers know when a deal is genuinely a good one.

For more information on our campaign to Put an End to Misleading Pricing visit the Which? website page.

By Pete Moorey, Head of Campaigns at Which?

If you have a complaint about misleading pricing in a supermarket see this advice by Which?

More on complaints about supermarket tactics to make us spend more here:

Radio 5live Breakfast Helen Dewdney talking supermarket tactics to make you buy more