Competition & Markets Authority
CMA to investigate ‘loyalty penalty’ super-complaint
The CMA recently (28 September 2018) received a super-complaint from Citizens Advice about long term customers overpaying for key services.
The Competition and Markets Authority (CMA) will now investigate concerns raised that people who stay with their provider - often on default or roll over contracts - can end up paying significantly more than new customers. Citizens Advice refers to this as a ‘loyalty penalty’.
- savings accounts
- household insurance
Citizens Advice has also asked the CMA to focus on vulnerable customers, who it fears can be hardest hit.
The CMA will now consider the concerns raised, and what should be done about them. This will include engagement with relevant regulators such as the FCA and Ofcom.
It will publish a response within 90 days and possible outcomes include:
- making recommendations to government to change legislation
- action by sectoral regulators
- taking competition or consumer enforcement action
- launching a market investigation or market study
- deciding there is no action required
This list is not exhaustive and there could be more than one outcome depending on the results of the investigation.
Daniel Gordon, Senior Director at the CMA recently said:
We will now carefully consider the concerns raised by Citizens Advice, and any further evidence on this issue. Our response will set out the CMA’s views on this important issue and any next steps we think are needed to make sure businesses don’t take unfair advantage of their long-standing customers.
The CMA is inviting interested parties to provide any evidence which may be useful to its assessment.
Find out more on the loyalty penalty super-complaint page.
Notes for editors
- The Enterprise Act 2002 (the Act) makes provision for designated consumer bodies to make super-complaints. A super-complaint, as defined by section 11(1) of the Act, is a complaint submitted by a designated consumer body that ‘any feature, or combination of features, of a market in the United Kingdom for goods or services is or appears to be significantly harming the interests of consumers’. Citizens Advice is a designated consumer body. Within 90 days after the day on which a super-complaint is received, the CMA must say publicly how it proposes to deal with it.
- In its super-complaint Citizens Advice defines vulnerable consumers as those on low incomes, older people, people with health problems and those with lower levels of formal education.
- Enquiries should be directed to the CMA’s press team: email@example.com, or 020 3738 6460.
Latest News from
Competition & Markets Authority
CMA sends tough message to business cheats with cartel campaign23/10/2018 09:20:00
The CMA is calling for more whistle-blowers to expose business cartels with the launch of a national awareness campaign.
Competition concerns over washroom suppliers’ merger19/10/2018 10:20:00
The CMA has provisionally found that Rentokil Initial’s purchase of Cannon Hygiene could lead to higher prices or lower quality for some customers.
CMA sets out scope of Sainsbury’s / Asda merger investigation17/10/2018 09:20:00
The CMA yesterday set out the issues it expects to examine in its investigation of the Sainsbury’s / Asda merger.
CMA provisionally clears media intelligence merger12/10/2018 12:20:00
The CMA has provisionally found that the proposed merger between Nielsen and Ebiquity does not raise competition concerns.
University laundry merger broken up by CMA12/10/2018 09:20:00
The CMA has decided that JLA must sell Washstation to preserve competition in the supply of managed laundry services to higher education providers.
SSE/Npower merger receives final clearance after consultation11/10/2018 09:20:00
The CMA has decided that the proposed merger between SSE Retail (SSE) and Npower can proceed, following a thorough review.
CMA launches immediate review of audit sector10/10/2018 09:20:00
The CMA has launched a detailed study of the audit sector to examine concerns that it is not working well for the economy or investors.
Algorithm research builds on work in digital markets09/10/2018 09:20:00
The CMA has published a study into pricing algorithms and whether they could be used to support illegal practices.