Ripped-off public losing faith in you, watchdog warns big business

CONSUMERS are on the verge of losing faith in capitalism after years of being ripped off by big businesses, the head of the Competition and Markets Authority warned yesterday.

Lord Tyrie called for changes to regulations that would make it easier to take action against unscrupulous firms.

The former Tory MP said customers are being treated appallingly by online titans, banks and energy companies.

He singled out firms that take advantage of loyal customers who do not shop around, squeezing them for extra profits. Banks, insurers and energy firms are notorious for offering consumers an eyecatching deal to get them signed up, then increasing prices remorselessly if they stay on for more than a year.

Speaking at the Social Market Foundation in London, Lord Tyrie said: ‘Half of people think the way business works is bad for society.

‘They feel that prices, particularly for essential utilities and services, are higher than they should be. They feel vulnerable to being exploited and having their choices manipulated, particularly online.

‘They think the reward for being a loyal customer is even higher prices.’

This is partly driven by the fact that consumers are often in a hurry and do not have time to shop around, he said.

He added the rise of the digital economy has ‘ rendered previously confident and capable consumers vulnerable to getting bad deals and poor service’.

He said: ‘It includes millions – perhaps even the majority – of the population, many of them “time poor”. They – us – are the “new vulnerable”. We are all vulnerable now.’

He called for ‘ stronger and swifter enforcement’ of competition and consumer law against the unscrupulous firms ‘that abuse their dominance [and] rip off their customers’.