Are loyal customer paying for their loyalty?

Well yes according to Citizens Advice!

Customers who show loyalty and stick with their current suppliers are losing up to £4.1bn a year. That has prompted Citizens Advice to make a super-complaint which, is to be investigated on behalf of consumers by the competition body.

The main areas where customers are being ripped off for showing loyalty are:

Savings accounts

Mortgages

Household insurance

Mobile phone contracts

Broadband contracts

Citizens Advice went on to say that the scam amounted to an average loss of £877 per person with vulnerable and older people bearing the brunt of the losses.

‘Systematic scam’

Gillian Guy, chief executive of Citizens Advice, said: “It’s completely unacceptable that consumers are still being ripped off for being loyal to companies they rely on every single day.”

This has also prompted responses by the Financial Conduct Authority (FCA) who will investigate claims that loyal customers may well be paying far too much for home and car insurance.

Additionally, The Competition and Markets Authority (CMA) will now carefully consider the raised concerns of Citizens Advice.

The legislation behind making a super-complaint came into being in 2002 and this is only the fourth time Citizens Advice have made one. This now gives the CMA 90 days to come up with ways to put an end to the systematic scam.

The range of possible options open to the CMA could include new laws, enforcement by regulators, or a full market investigation.

The FCA who regulates most types of mortgages and insurance in the UK have added they have been concerned by the issue for a long time.

The FCA’s chief executive, Andrew Bailey said, “We expect firms to look after the interests of all customers and treat them fairly, whether they are new or long-standing.”

At True Cost Mortgages, we treat our position as whole of market, independent advisers very seriously, and keep a constant eye on both the mortgage and the insurance market to ensure our clients are getting a fairest deal available at the time.