On 28 September 2018, the Competition and Markets Authority (CMA) announced that it is investigating a super-complaint lodged by Citizens Advice about long term customers overpaying for key services.

The Enterprise Act 2020 makes provision for designated consumer bodies to make a super-complaint. A super-complaint, as defined by section 11(1) of that Act, is a complaint submitted by a designated consumer body (in this case Citizens Advice) that ‘any feature, or combination of features, of a market in the UK for goods or services is or appears to be significantly harming the interests of consumers’. Within 90 days after the day on which a super-complaint is received, the CMA must say publicly how it proposes to deal with it.

Citizens Advice super-complaint identifies five essential markets where it has concerns about long term customers overpaying for key services:

  • savings accounts;
  • mortgages;
  • household insurance;
  • mobile; and
  • broadband

The super-complaint estimates that loyal customers in these markets are overcharged almost £900 per annum. The super-complaint concludes that systematic improvements for loyal customers in these markets can only be achieved by reforms to how these markets are designed and the rules firms in these markets follow. The super-complaint recommends the CMA undertake a thorough, cross-sectoral market study into the penalty paid by loyal and disengaged consumers. In addition, Citizens Advice has asked the CMA to focus on vulnerable customers, who it fears can be hardest hit.

Citizens Advice states that the CMA’s market study should consider:

  • what more can be done to encourage consumers to engage in markets where the loyalty penalty exists;
  • what direct interventions into these markets are necessary to protect consumers from exploitation; and
  • what specific protections for low-income and vulnerable consumers who pay the loyality penalty are necessary.

The FCA has also issued a statement in support of the concerns raised by Citizens Advice.

Andrew Bailey, chief executive at the FCA, said the regulator intends to work closely with the CMA to investigate the super-complaint. He said: “We expect firms to look after the interests of all customers and treat them fairly, whether they are new or long-standing.”

In its interim report on the mortgage market study published in May, the FCA identified a number of actions to be taken to ensure consumers find the best-priced mortgage deal and pledged to help longstanding borrowers who are currently unable to switch to a better deal (often referred to as ‘mortgage prisoners’).