Are you still be­ing made to pay the price of loy­alty?

Derby Telegraph - - YOUR MONEY -

DID you know you pay a hefty fi­nan­cial price for stay­ing loyal to a busi­ness? From in­sur­ance to broad­band, chances are you’re be­ing hit with a loy­alty tax for stay­ing with the same provider of the ser­vice.

In one of the most shock­ing ex­am­ples I’ve ever seen, I spoke to a man whose el­derly mother was pay­ing just shy of £2,000 for home in­sur­ance. He found a neigh­bour us­ing the same com­pany who was pay­ing just £300 for the same pol­icy.

For years, busi­nesses have ac­knowl­edged that this is un­fair and promised to change their ways – but never have. How­ever, in the last year, thanks to me­dia pub­lic­ity we reached a tip­ping point where the prac­tice be­came so well known that peo­ple be­gan to look at poli­cies and get an­gry.

The Com­pe­ti­tions and Mar­kets Au­thor­ity (CMA) in­ves­ti­gated five in­dus­tries; sav­ings, mort­gages, in­sur­ance, mo­bile and broad­band ser­vice providers, and found that an as­ton­ish­ing £4bn ex­tra a year was be­ing paid out by loyal cus­tomers, with more vul­ner­a­ble peo­ple, or those strug­gling fi­nan­cially likely to be stuck pay­ing more.

Though this prac­tice is fi­nally be­ing clamped down on, don’t ex­pect changes overnight.

Loy­alty rarely pays

TIPS TO AVOID PAY­ING HIGHER PRICES ■ WHEN you sign a con­tract, put a note into your cal­en­dar for when the con­tract runs out. Then go back a month and put a re­minder in so you’re pre­pared in ad­vance.

■ SHOP around ahead of the con­tract re­newal. Keep an eye on the news for bad/good deals and busi­nesses that have been warned or fined.

■ NEVER as­sume your loy­alty means you’ll be treated bet­ter. You won’t and you’ll be over­charged. ■ BE WARY of con­tracts that run over a year if you’re likely to change your life­style – you may have to pay fees to get out of them.

IF YOU’VE BEEN OVER­CHARGED:

■ START by turn­ing de­tec­tive. Find out when you signed up to the con­tract and when the orig­i­nal one was sup­posed to ex­pire. If you’re pay­ing for a phone or other goods as part of the con­tract, look for the date the item is paid off (it will be on your bill or on­line ac­count).

■ GO TO the web­site and see what you would be charged if you were a new cus­tomer for the same pack­age. It’s worth check­ing com­par­i­son sites too, in case there are even cheaper deals around.

■ CON­TACT the busi­ness and ask them to ex­plain why you’re pay­ing a higher price than a new cus­tomer and ask them to re­duce your bill or match the price. Be pre­pared to vote with your feet.

■ THE rules don’t say that the busi­ness has to re­fund you for what it’s over­charged you. But you can make a com­plaint and ask for the money back – and there are om­buds­men you can go to for free for all the in­dus­tries that have been in­ves­ti­gated so far.

Most im­por­tantly, spread the word. Chances are you have a rel­a­tive or friend who isn’t aware of the sav­ings they could be mak­ing by shop­ping around. Have a chat and help them find a bet­ter deal or make a com­plaint. Start­ing 2019 with more cash in the bank is a good way to go on.

■ Re­solver can help you sort out com­plaints about pretty much any­thing. Check out re­solver.co.uk and share your ex­pe­ri­ences at yoursto­[email protected] re­solver­group.com

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