The Competition and Markets Authority (CMA) investigated the loyalty penalty - where companies penalise longstanding customers by charging them higher prices than new customers or those who renegotiate their deal - in response to concerns raised by Citizens Advice in a super-complaint.
In its December 2018 report, the CMA uncovered bad practices by firms in the 5 markets highlighted by the super-complaint: mobile phone contracts, broadband, household insurance, cash savings and mortgages. These included continual year on year price rises, costly exit fees from contracts, time-consuming and difficult processes to cancel contracts or switch to new providers, and auto-renewal policies that switched unsuspecting customers onto more expensive contracts, often without sufficient warning.
In its response to the super-complaint, the CMA made a number of recommendations to Ofcom and the Financial Conduct Authority (FCA), the regulators that govern these sectors, and government to help them better protect consumers. It also launched its own investigations examining auto-renewal practices in two sectors.
Today's report provides an update on the progress made by regulators one year on, and highlights areas where it expects to see further and more timely action.
Updates include:
