Local MP Highlights Research Showing Loyal Customers Could Be Losing Out

Local MP and Vice Chair of All Party Parliamentary Group for Consumer Protection, Justin Tomlinson, has taken part in an important roundtable in Parliament which discusses consumer rights and how businesses act towards long-term customers.

The APPG works to provide a voice for ordinary retail consumers across a range of sectors in the UK economy and to raise awareness of issues, rights & obligations in the field of consumer protection with parliamentarians and the wider public.

Since his election in 2010, Justin has actively campaigned on a variety of issues to improve consumer protection and ensure that all buyers are equipped with clear, relevant information which allows them to make an informed choice. 

He has pushed Ministers to change the law on how charges on bills, loans & mortgages are displayed (after it became apparent even Treasury Ministers couldn't calculate APR), called for greater powers for consumers to challenge businesses who rip off customers, and championed the campaign to encourage more consumers to switch providers their providers good & services like energy, mobile phones & insurance. This sits alongside his successful campaign to add Financial Education to the National Curriculum – so students learn about money, interest and finance in Maths & Citizenship through real-world scenarios.

As part of the roundtable, representatives from Citizens Advice, the Competition & Markets Authority, and the Financial Conduct Authority joined businesses, trade bodies and MPs to discuss new research which shows the vast majority of customers who stay with a provider are actually worse off as a result of their loyalty.

Data from Citizens Advice shows that if a customer stays loyal to their providers in six essential service markets – energy, mobile, broadband, home insurance, fixed rate mortgages, and savings – they could be on average £1,000 a year worse off than those who frequently switch. However consumers do not appear to be aware of this inbuilt loyalty penalty, and as well as not benefitting from loyalty bonuses through reduced bills many are being stung by increased exit charges which go unnoticed.

As part of its work, the cross-party group will be making recommendations to Ministers to increase public awareness of the benefits of switching, and Justin has highlighted the importance of ensuring that companies produce clear information, in plain English, to ensure customers know the exact value of the bill and a breakdown of its various parts.

The roundtable also highlighted inbuilt issues which prevent some consumers from acting to reduce their bills; including online-by-default registration and e-billing via direct debit, which while simpler often sees customers pay bills without know exactly what money has been taken.

Justin Tomlinson MP said: “Ensuring consumers have strong legal protections and access to clear & relevant information to make an informed, savvy decision is something I have actively campaigned on in Parliament. These tools equip a person to make decision to switch providers and ultimately save money. This latest research by Citizens Advice showing the inbuilt loyalty penalty of around £1,000 a year for consumers shows that while more people than ever are switching, we still need to do more to ensure consumers know exactly what they are paying. The APPG & I will be looking very closely at this issue and feeding ideas in to Ministers to give consumer greater powers and further protections.”