What price loyalty? About £4bn a year and YOU’RE paying
As Citizens Advice issues an official complaint on customers being ripped off for staying with the same company, one consumer is stirred into action
MY name is David and I am an inert consumer. I now realise that for years I have been in denial. In fact I didn’t know that it was even a problem. But last week I started to realise the full repercussions of my inertness and it has now been brought home to me just how much it has cost me, my family and society as a whole. I feel impoverished, foolish and ashamed
I know it won’t be easy but from today I am determined to set out on a better way. To myself I call it “ertness’ (the opposite of inertness) because “active” feels too much of a challenge at the moment. But “active” is the word people use and that is what I must strive to become – an active consumer. I know it will take effort. The very words make me feel nervous, tired and panicky, which just shows how far I have to travel.
All the companies I rely on for utilities and security – my bank, power suppliers, home and car insurance, mobile phone, home phone, broadband and all that – have had me as a customer for years, some of them for decades.
How often did I question their charges, how often did I challenge them? Never! They are all (except the bank of course) on rolling direct debits. Did I think that because I was a long-term customer they would look after me, reward me for my loyalty? I suppose I did. I was of course aware of a constant murmur about overcharging and so on. I think I did even once look at the uSwitch website... but not for long.
Last Friday Citizens Advice (which I still thought was called Citizens Advice Bureaux – it only changed its name as recently as 2003) published a report saying households were paying up to £900 too much each year because they were doing what I do (or don’t do). And that didn’t even include fuel bills.
Nationally consumers are being ripped off to the tune of £4billion annually. I don’t know which figure is more horrifying: £900 is a hefty chunk for almost everybody and £4billion extra per year is what it would take to keep the NHS on an even keel.
The report talks about the “loyalty penalty” – a chilling phrase. I am old-fashioned enough to think that loyalty should be rewarded, not penalised. Deludedly I thought loyalty was a reciprocal thing. You are loyal to them, they are loyal to you. Clearly that was just laziness on my part. But am I dreaming, or was there a time when long-term customers did get better treatment than others?
For too many companies old customers are simply cash cows. They don’t ask questions, they just pay. Do you give them special rates and improved deals? Of course not, why would you? They are, after all, inert.
IT’S the new customers who get the come-ons, the bonuses, the cheap rates. But not for long because a new customer soon becomes an old customer and unless they are “ert” – the opposite of inert – they will, after the honeymoon, get quietly screwed.
Much as I, like millions of others to their cost, have tried to ignore it, being a consumer (or just being alive) is a demanding business these days. You have to make demands.
There are only two ways to go: we must either be actively disloyal to the companies we deal with, always on the lookout for a change, or else “actively loyal”, energetically threatening our suppliers that we will take our business elsewhere unless they give us a better deal.
I, being a habituated inert consumer, have almost no experience of this. Yesterday, dipping my toe in the water, I called my mobile phone supplier to ask whether I was entitled to an upgrade. The man, polite and charming, pulled up my file.
“You’ve been with us for a very long time,” he said. The old me would have felt a surge of warmth; the new me thought this might be some sort of accusation.
“Yes, your contract ended in July and you’ve had your phone for years. We can give you a new phone, give you more data and knock £20 off your monthly charge.” He said that if I hadn’t contacted them, they would have contacted me within four months of my old contract ending.
So, a successful call. But why the four-month delay before they would have called me – that’s £80 – and would they have reduced my charge automatically if I hadn’t contacted them? I must admit, they do send me endless texts about new things they’re doing or ways they are changing the service, but being inert and not really needing any new services I never read them.
My fault! But we live in tiring times. We are constantly peppered with messages. You can’t order so much (or so little) as a bar of chocolate without receiving a follow-up email asking you to rate the service and, on a scale of one to 10, how likely you are to recommend it to a friend. I tend to ignore all messages unless they are from a loved one.
This has to stop! Knowledge is power. This is the 21st century. These are anxious times. I have friends who change energy suppliers so often it’s like speed dating. Website Look After My Bills, which I saw on Dragons’ Den, has algorithms that will automatically move you to the best fuel deal.
GOOD! But as an active or hyperactive consumer I shall want to know whether they are actually the best at doing that. As for comparison websites, as a hyperactive consumer I shall want a comparison website of comparison websites.
I am sure we are all grateful that there are now ways of finding out how to get the cheapest deal at a given hotel, or the best betting odds (about which I understand absolutely nothing) but the oceans of information available don’t half make life exhausting. A bit of me yearns for the old days when we had no choice and were simply ripped off by a monopoly (e.g. British Gas). Life seemed so much more serene (so long as you didn’t need the gas man).
I appreciate that for me – a helpless victim who pays up without looking – to transition into Anne Robinson in a bad mood will not be easy. You have to be tough and skilled and you need to show bottle. You have to be able to understand a gas bill and negotiate websites that are impenetrable. It could turn into more or less a full-time job. “What did you do today David?” “I read a novel and went for a walk. What did you do?”
“Well in the morning I changed gas suppliers, then I spent a couple of hours comparing prices for home insurance. I change companies every year. It takes a couple of days but it’s well worth it. And I’m just researching which phone company I should be with...” Is that really the way I want to live my life?
Kill that thought! I must become an active consumer not just for my own sake but for the sake of others because being an active consumer is part of being a responsible citizen. Your restaurant meal was horrible, or cold. Did you send it back? I must admit I never have. But I should. How else will restaurants be deterred from serving cold, bad food to others?
Every time I allow rotters to get away with overcharging or underproviding, I am enabling them to keep doing it to others. I have been an inert consumer but I know it’s my duty to become a harasser, complainer, a man who knows that if you want to be a long-term customer it will take tough love, with you being the tough one.
Citizens Advice has lodged what’s called a Super Complaint with the Competition and Markets Authority (CMA) which is obliged to look into this loyalty penalty business. Only serious bodies lodge Super Complaints, organisations such as Energywatch and CAMRA, the Campaign for Real Ale. Good to know! If I’m going to turn myself into a consumer with bottle, real ale may have to play a part.
An old work colleague of mine used to say (quite often) “Loyalty is what they **** you with”. I am going to get that tattooed on my forehead.