NATIONAL: Consumers paying more for staying loyal to companies, says Citizens AdviceÂ
Citizens Advice said the practice of overcharging loyal customers was ongoing and widespread and called on the Competition and Markets Authority (CMA) to '˜act now to stop people being exploited'.
Research by the organisation found British consumers are losing £4.1bn a year across the five essential mobile, broadband, home insurance, mortgages and savings markets to the '˜loyalty penalty', with eight in 10 people paying a significantly higher price to at least one of their providers for remaining with them.
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Hide AdIt found the loyalty penalty is on average £877 per year - equal to three per cent of the average household's total annual expenditure.
The charity found the loyalty penalty is disproportionately paid by vulnerable consumers such as older people and those with mental health issues.
Chief executive Gillian Guy said: '˜It beggars belief that companies in regulated markets can get away with routinely punishing their customers simply for being loyal.
'˜As a result of this super complaint, the CMA should come up with concrete measures to end this systematic scam.'
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Hide AdThe CMA confirmed it would investigate the concerns with regulators such as the Financial Conduct Authority and Ofcom and publish a response within 90 days.
Eric Leenders, from trade association UK Finance, said: '˜UK Finance and its members will carefully consider the issues raised by Citizens Advice and respond in due course.
'˜The industry has already implemented a number of measures to further improve competition in the mortgages and savings market.
'˜We would always encourage customers to shop around and find a deal that best suits their needs.'
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Hide AdAssociation of British Insurers director general Huw Evans added: '˜In any market where there is regular switching and fierce competition for new business, good deals are available to those who shop around but this does mean long-standing customers can lose out.'