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The loyalty penalty in essential markets - two years since the super-complaint

5 October 2020

The loyalty penalty in essential markets - two years since the super-complaint [ 2.2 mb]

When the Competition Markets Authority (CMA) investigated our super-complaint in September 2018, they agreed with our findings. They called on regulators to take action in every market that we had found loyal customers were being exploited in.

Since then, regulators have made progress but there’s still more to do:

  1. In all markets, proposals need to turn into action. Regulators and providers must reduce loyal customers’ bills as a priority.
  2. All mobile providers must ensure people aren’t charged for a mobile handset they’ve already paid for. Ofcom needs to take stronger action to make voluntary commitments compulsory and permanent, backed up by government action if need be.
  3. In the insurance market, the FCA should implement their proposals to abolish the loyalty penalty by cracking down on gradual year-on-year price increases as soon as possible.
  4. In cash savings, the FCA needs to implement Single Easy Access Rates as soon as possible.
  5. In the mortgage market, the FCA must act to reduce or eliminate the loyalty penalty and ensure vulnerable customers are on the best deal.
  6. In broadband, firms should do more to help vulnerable customers who've been out of contract for a long time. All providers should turn one-off commitments into permanent solutions and provide extensive price reductions to vulnerable consumers.

The full update can be read here [ 2.2 mb].