Citizens Advice has said that it is concerned that loyal customers have been penalised by nearly £3 billion since it submitted its super-complaint. The charity lodged a super-complaint in September calling for the Competition and Markets Authority (CMA) to outline how the loyalty penalty could be fixed in five essential markets (mobile, broadband, home insurance, mortgages and savings).

Citizens Advice said that the Competition and Markets Authority (CMA) was clear in its December response that it wanted to see urgent action and that the relevant regulators – Ofcom and the Financial Conduct Authority (FCA) – would update on their progress within six months. That deadline is today. The charity is concerned that the delay in cracking down on the loyalty penalty means customers are still losing out.

Ofcom has announced that it will make companies send a reminder to their customers when their contract is about to end. But given the scale of the loyalty penalty, Citizens Advice don’t think this will be nearly enough to solve the problem.

The charity wants both Ofcom and the FCA to demonstrate they’re serious about tackling the loyalty penalty by considering measures such as targeted pricing interventions and making sure vulnerable customers aren’t being penalised.

Citizens Advice is calling on the regulators to take the following actions in each market urgently:

  • Mobile – Ofcom should move more quickly to end the mobile loyalty penalty by automatically putting customers onto a fairer tariff. If they don’t, the government should legislate.

  • Mortgages – The FCA should require firms to put vulnerable and low-income customers on to better value mortgage deals.

  • Home Insurance – The FCA needs to consider limiting or banning ‘price-walking’ and require companies to put vulnerable or low-income customers on the best value deal for their circumstances.

  • Savings – The FCA needs to confirm their proposal to introduce a basic savings rate, which they estimate will save customers a net £300 million a year.

  • Broadband – Some loyal customers on standard deals are paying more than new customers for superfast broadband. Ofcom must ensure that firms are making sure their customers are on the best deals for them and ensure vulnerable customers are on the best deals for their circumstances.

Gillian Guy, Chief Executive of Citizens Advice, said “We’re disappointed that a lack of action from regulators means customers continue to be penalised simply for being loyal to their provider.”

“In its response to our super-complaint the CMA set out ambitious recommendations for tackling the loyalty penalty. But it seems little progress has been made by the regulators within the first six months. This is not good enough. The FCA and Ofcom need to urgently set out their plans for tackling this systematic scam.”

In an update to the Super Complaint Christopher Woolard, Executive Director of Strategy and Competition at the Financial Conduct Authority (FCA), said “Before the CMA published its supercomplaint response last year, we had already begun work in the mortgages, cash savings and general insurance markets. Ensuring that markets work well for longstanding and vulnerable consumers continues to be a priority for us and the loyalty penalty is a serious issue. We will continue to work closely with the CMA and other regulators on the recommendations relevant to us.”

Responding to the CMA and FCA updates on consumer loyalty, Simon McCulloch, director at, said “Consumer inertia has been used by some companies to penalise loyal customers for too long. Consumers say that the financial catalyst to switch insurance is on average around £65, but the potential saving is often in the hundreds of pounds. Some companies have been using the psychological barriers to switching for their own profit. Markets which charge renewing customers higher prices in order to provide discounts to new customers do not always work in the best interests of customers. The CMA and FCA recognise that the current system is not working for consumers. Whilst regulatory intervention is helpful and may indeed be necessary to protect some customers from being disadvantaged, savvy consumers can save the most money taking things into their own hands by shopping around, rather than by sticking with their current provider.”