Citizens Advice launches 'super complaint' over £4 billion loyalty penalty - MSE News

Former_MSE_Andrea

CMA_Communications wrote: »

Thank you Callum for starting this discussion.

My name's Gill and I work for the the Competition and Markets Authority - we are the organisation that has received the super-complaint from Citizens Advice (we have a duty to respond within 90 days). We're an independent public body that aims to make markets work well for people and ensure that companies follow the law.

As part of our work on the super-complaint, we are really interested to hear about people’s experiences with the ’loyalty penalty’, where they have been charged a higher price or got a worse deal than new customers, and found it difficult to negotiate a better deal or switch to a new supplier.

The Citizens’ Advice complaint has found that this type of practice is particularly common in contracts for mobile phones, broadband, home insurance, mortgages and savings, and we would like to know what you think about the issue. We’re also interested to hear what you think about this issue in other areas too. Do you enjoy shopping around and switching suppliers to get a new customer offer? Or do you think it’s a problem? If you have been charged a higher price than new customers, how did you find this out? What stopped you from switching or negotiating a better deal with your existing supplier, or what difficulties did you face when you tried to do so?

You can comment on this thread or let us know what you think by emailing us at [EMAIL="LoyaltyPenalty@cma.gov.uk"]LoyaltyPenalty@cma.gov.uk[/EMAIL]. We won’t be able to reply individually, but rest assured that your experiences will help inform our work. And you can keep in touch by following our super-complaint case page (https://www.gov.uk/cma-cases/loyalty-penalty-super-complaint) which we will keep updated with progress, and where we will publish our findings.

Many thanks!

Thanks for posting Gill.

Folks, please do comment on this and help inform the CMA's work.

Emma6

I think the insurance companies should be required to justify any increase (or decrease) in premium against the specific insured risks in detail. This should ensure older customers' car and household insurance should reduce as they get older if nothing else has changed.

I suspect the excessive premiums go to funding bonuses and dividends for those working in the insurance selling operation and their owners, not the underwriting firms writing the policies.

The_Big_Bamboo

Emma6 wrote: »

I think the insurance companies should be required to justify any increase (or decrease) in premium against the specific insured risks in detail. This should ensure older customers' car and household insurance should reduce as they get older if nothing else has changed.

I suspect the excessive premiums go to funding bonuses and dividends for those working in the insurance selling operation and their owners, not the underwriting firms writing the policies.

That’s an excellent idea.

12 months ago my son paid £830 for his car insurance with Admiral;...held licence for 7 years, no convictions/claims etc etc.

His recent renewal quote from Admiral was £940,...an increase of almost 15%, despite another years NCB and no material changes whatsoever.

After scouring the comparison sites he eventually chose insurance (with virtually identical Ts&Cs, but a cheaper excess!) from QuoteMeHappy.com which cost £600.08,...fully £340 less than had he stayed ‘loyal’ to Admiral.

One thing notable was the difference that the comparison sites were quoting for exactly the same cover with the same insurance company; i.e. QuoteMeHappy.com:
Moneysupermarket quoted £666.93
Gocompare quoted £652.09
Comparethemarket quoted £652.03
Uswitch.com quoted £648.41
Confused.com originally quoted £631.94, ... but it then dropped to £600.08 three days later which is the cover my son actually purchased.

It certainly doesn’t pay to be loyal to insurance companies;...or comparison sites for that matter!

Raxiel

The_Big_Bamboo wrote: »

That’s an excellent idea.

12 months ago my son paid £830 for his car insurance with Admiral;...held licence for 7 years, no convictions/claims etc etc.

His recent renewal quote from Admiral was £940,...an increase of almost 15%, despite another years NCB and no material changes whatsoever.

After scouring the comparison sites he eventually chose insurance (with virtually identical Ts&Cs, but a cheaper excess!) from QuoteMeHappy.com which cost £600.08,...fully £340 less than had he stayed ‘loyal’ to Admiral.

One thing notable was the difference that the comparison sites were quoting for exactly the same cover with the same insurance company; i.e. QuoteMeHappy.com:
Moneysupermarket quoted £666.93
Gocompare quoted £652.09
Comparethemarket quoted £652.03
Uswitch.com quoted £648.41
Confused.com originally quoted £631.94, ... but it then dropped to £600.08 three days later which is the cover my son actually purchased.

It certainly doesn’t pay to be loyal to insurance companies;...or comparison sites for that matter!

We're going to need a comparison site for comparison sites soon!