Have YOU paid £715 for cover British Gas sells new customers for £500 less?

Outrage as utility giant charges THREE TIMES more for the same service

BRITISH Gas is embroiled in a ‘scam’ where its most loyal customers are being charged up to £500 more a year for exactly the same boiler and heating breakdown insurance that new customers are receiving.

The energy giant is squeezing this extra cash out of up to four million customers who have taken out its HomeCare cover. Experts believe it is a desperate move to make up for a severe dip in revenues caused by a haemorrhaging of energy customers.

British Gas – owned by FTSE100 listed company Centrica and trading as Scottish Gas north of the Border – recently admitted it is losing almost 100,000 customers a month as a result of price hikes that have added £100 to average energy bills in a year. It offers a range of HomeCare insurance deals – from straightforward boiler cover though to policies that embrace hiccups with central heating, plumbing, drains and electrics.

The energy giant recently wrote to customers stating it was ramping up the cost of annual cover by as much as 25 per cent. It now wants longstanding customers to pay as much as £715 a year. But cover for new customers can cost as little as £234 a year with a £50 gift card thrown in as an extra incentive. So loyal customers are paying three times more for the same cover.

The City’s regulator recently launched a probe into the multi-billion pound insurance market amid claims that loyal customers are routinely paying more for cover than new ones. The Financial Conduct Authority says many customers who have been with the same insurer for five years are paying 70 per cent more for cover than someone buying the same policy for the first time. This is an injustice that over the past year has regularly been highlighted by The Mail on Sunday’s Broken Loyalty campaign.

James Daley is founder of consumer website Fairer Finance. He says: ‘The game could soon be up for rip-off insurance policies. This probably explains why British Gas is squeezing every last drop out of its boiler cover customers while it can. The profit margin on this policy must be huge if it can get away with offering new customers cover for a third of the price that loyal customers are paying.’

The bid to exploit existing boiler cover customers is being backed by a £55 million a year ‘retention marketing’ campaign, with advertising agency MediaCom using cartoon penguin Wilbur to promote the cover on television at peak time over the festive season. The energy supplier has almost 13million customers with