Age Scotland supports watchdog's request for new powers to tackle loyalty penalties "ripping off" older scots

The national charity for older people, Age Scotland, has welcomed today’s news that the UK competition watchdog, the Competition & Markets Authority (CMA), is seeking new powers to fine and impose price caps to tackle loyalty penalties in insurance, broadband, mobile phones and savings account services.

The watchdog investigated concerns raised by Citizens Advice in a super-complaint where companies were penalising existing customers by charging them higher prices than new customers.

The CMA has estimated that the loyalty penalty could be costing consumers £4bn a year with vulnerable customers hit the hardest. Millions of people are affected - around 1 million in the mortgage market to nearly 12 million in the insurance market. The watchdog has proposed the reforms to the government and other regulators including the FCA and Ofcom.

Commenting on the news, Adam Stachura, Age Scotland’s Head of Policy and Communications said:

“We welcome these recommended reforms from the Competition and Markets Authority, which creates more transparency and rights for consumers. It’s shocking that companies are using shady marketing tactics and ripping off loyal customers with unclear automatic renewals, stealthy annual price increases and not giving customers enough time to make the best choice for their needs and budget.

“We encourage other companies to review their practices to make it consistent and fairer for everyone, irrespective of how long they have been a customer or how they buy the product.

“Older people tell us they prefer face to face service and are less likely to go online to find the best deals, which makes them more vulnerable to price hikes. And for the 500,000 people over the age of 60 in Scotland who do not use the Internet, the options to shop around and switch suppliers are pretty complicated.

“We call on the UK Government to review these recommendations and ensure that consumers, including its most vulnerable, are getting the best deals. “