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Money from being a loyalty customer

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The 61-year-old had been a home and contents insurance customer with the same provider for 20 years, and was eventually paying £2,000 a year. One phone call querying the cost reduced the annual premium to £750. Now the UK's competition watchdog has said millions of unsuspecting customers were being exploited by bad practices by firms. It has responded to a so-called super complaint from Citizens Advice which argues that loyal customers are being "ripped off" for mobile, broadband, savings, home insurance and mortgage deals. 

Findings by the Competition and Markets Authority (CMA) included year-on-year "stealth price rises", costly exit fees, difficulties for customers to cancel contracts or switch providers, and consumers being required to automatically renew a contract. 

Andrea Coscelli, chief executive of the CMA said: "Our work has uncovered a range of problems which leave people feeling ripped off, let down and frustrated. They shouldn't have to be constantly on guard, spending hours searching for or negotiating a good deal, to avoid being trapped into bad value contracts or falling victim to stealth price rises. Millions of loyal or vulnerable customers are being taken advantage of each year by firms - and end up paying much more than they should do. This must come to an end. It backed up Citizens Advice claims that customers who stick with their supplier are losing a total of £4.1bn a year, the equivalent to an average of £877 per person.

How do companies use my loyalty card data? Insurers pledge fairer premiums for long-term customers that cost was higher for Mr Munday. He said his insurance premium with Santander was £2,000 a year, having used their services for two decades. When he shopped around, he was quoted a price of £469 from another provider. He contacted Santander, which said it could reduce his premium to £750. "It is despicable. They are treating loyal customers really poorly," he said. "Loyalty should be worth something. It would be good if big companies rewarded people accordingly." He said that putting up premiums each year was "an easy way for them to make more money". For him, a saving of £100 a month was an important difference.

Santander said that the cost reflected some claims made on the policy. It said that a renewal notice would have pointed out that he may have received a better deal with another product from Santander or elsewhere. "Santander is constantly working to ensure that our prices are fair and competitive," it said. "We will continue to do this and the Citizens Advice super complaint and recent-announced FCA market review will be a key consideration for us.

Posted by MMB Finance Swindon on 19 December 2018