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People who stick with essential service providers such as broadband firms are paying more than new customers, Citizens Advice has warned.

According to the body, loyal customers are routinely charged more than new customers in several key markets: broadband, mobile, energy, home insurance, fixed rate mortgages and savings accounts.

Estimates from Citizens Advice suggest that people could therefore be paying £987 more per year by sticking with their service providers.

The organisation also claimed that companies are using "unfair tactics" to take advantage of people's behaviour and put them off searching for better deals.

This, it said, includes making the terms and conditions of contracts overly complex, failing to tell people when contracts are ending and charging people to exit a contract.

As a result, industry regulators have been urged to set targets to bring down the number of people being penalised for staying loyal.

Citizens Advice also called on watchdogs to investigate solutions for vulnerable customers, as people aged 65 and above, those on low incomes and people without a university education were found to be the most likely to be affected by this problem.

Gillian Guy, Chief Executive of Citizens Advice, said: "It is unacceptable that consumers who stick with their existing provider of important services like energy and broadband are being penalised for their loyalty.

"Companies routinely use tactics that take advantage of human behaviour - and regulators are letting them get away with it."

Ms Guy added that the upcoming Consumer Green Paper gives the government an opportunity to show it is on the side of the consumer by protecting them from "unfair practices that exploit their loyalty”.

This comes shortly after the body called on ministers to establish a telecoms consumers advocate, who will speak up on their behalf, as this would "reflect how essential these services are to people".

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