Finishing the job on the loyalty penalty: the mortgage and mobile handset markets

Finishing the job on the loyalty penalty: the mortgage and mobile handset markets [ 0.58 mb]

In 2018, Citizens Advice submitted a super-complaint to the Competition and Markets Authority (CMA) about the loyalty penalty. Since then, regulators have made good progress to prevent loyal customers being exploited in some markets. But in other markets, there is much more to do. 

In the mortgage market, we are concerned that the Financial Conduct Authority (FCA) have not set out any concrete proposals to prevent households on the Standard Variable Rate (SVR) paying the loyalty penalty. 

In the mobile market, Ofcom have come to voluntary arrangements with some providers to remove or reduce the loyalty penalty paid by bundled contract customers. But some providers continue to charge customers for a handset they have already paid off. 

The coronavirus pandemic has had a devastating impact on household finances. As government and regulator support schemes come to an end, many will struggle with the long-term impact of lost income and debts built up over the last year. They should not face the loyalty penalty on top of this. 

We want to see mobile providers and the FCA take concrete, enforceable action now, to finish the job on the loyalty penalty.