Charity network Citizens Advice has lodged a ‘super-complaint’ with the Competition and Markets Authority as new research shows that longstanding customers are having to pay an extra £4bn a year.
Citizens Advice looked across markets for savings and mortgages, as well as three other “essential” markets including home insurance, mobile and broadband, finding that British consumers are paying a £4.1bn “loyalty penalty” by staying with their providers.
In at least one of the five markets, Citizens Advice says 80 per cent of people pay a significantly higher price for staying put, and that average penalties are £877 a year.
The charity has called on the CMA to show how it intends to fix the problem, which it says disporoportionately affects vulnerable customers.
The FCA put out its own response to the complaint this morning, noting that “the FCA has been concerned about the issue of longstanding customers being charged more for some financial products than new customers for some time” and that this has “informed earlier work on cash savings and mortgages”.
FCA chief executive Andrew Bailey says: “Citizens Advice have raised a number of important issues and we will work closely with the CMA as they investigate this super-complaint.
“We expect firms to look after the interests of all customers and treat them fairly, whether they are new or long-standing.”