Relief in sight for loyal customers as rip-off bills face crackdown

THE Government is launching a crackdown on rip-off bills and could force companies to share customers’ data so they can switch providers at the click of a button, potentially saving up to £900 a year.

The Department for Business, Energy and Industrial Strategy has said it could use a Smart Data review to force bill providers to sign up to new switching apps, which move people on to cheaper deals automatically.

Switching apps are being developed by private companies, but rely on bill providers agreeing to let their customers use them.

It comes as competition regulators are investigating energy, telecoms, insurance and bank account providers after Citizens Advice lodged a super complaint over rip-off bills for people who don’t switch every year.

The charity found that customers who remain loyal to their utility providers are being penalised by £4billion a year, or £877 per household.

Eight in 10 consumers are paying a significantly higher price to at least one of their bill providers for remaining with them, it found. Rip-off charges are disproportionately paid by vulnerable consumers, such as older people and those with mental health issues, who are likely to struggle with switching.

Citizens Advice said the practice was widespread, and called on the Competition and Markets Authority to “act now to stop people being exploited”.

Kelly Tolhurst, the consumer minister, said: “Britain has long been a world leader in ensuring that markets work in the interests of consumers, but many loyal customers are still paying more than they need to.

“The Smart Data review will enable the development of new technologies to make it easier to access the best deals, and follows tough action we have taken in the energy market through our price cap, which will protect over 11million households from poor value default tariffs this winter.”

Gillian Guy, Citizens Advice chief executive, said: “It beggars belief that companies in regulated markets can get away with routinely punishing their customers simply for being loyal. As a result of this super complaint, the CMA should come up with concrete measures to end this systematic scam.

“Regulators and government have recognised the loyalty penalty as a problem for a long time yet the lack of any meaningful progress makes this super complaint inevitable.”