Category Archives: Money & Debt

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Citizens Advice response to CMA announcement of 6 month extension

Friday 24 January 2020

Today the Competition and Markets Authority (CMA) has announced an extended deadline of six months to ensure regulators take effective action tackling the loyalty penalty.

The CMA has previously been clear that it wanted to see urgent action, and Ofcom and the Financial Conduct Authority (FCA) agreed to update on their progress within 12 months. While some progress has been made, Citizens Advice supports the CMA’s decision to extend the deadline. Regulators must use this time to tackle the loyalty penalty once and for all.

Dame Gillian Guy, Chief Executive of Citizens Advice, said:

“The loyalty penalty is a huge problem, and too often affects those who can least afford it. The government and regulators have promised action, but today’s update shows that progress has been slow and inconsistent.

“Ofcom and the FCA have begun to make some progress, but both must make sure all providers stamp out the loyalty penalty.

“The six-month extension granted by the CMA gives regulators extra time to tackle this practice. But, if real change isn’t achieved in the coming months, we’ll be looking to government to take strong action where regulators have not or cannot.”


Citizens Advice submitted a super complaint on the loyalty penalty – in the mobile, broadband, home insurance, mortgages and savings markets – to the CMA in September 2018 calling for it to consider how the problem can be fixed. The CMA’s response to the super complaint, the following December, said it agreed and had found damaging practices by firms which exploit unsuspecting customers. The CMA said it wanted to see urgent action.

Research in 2018 by Citizens Advice found that across five essential markets (mobile, broadband, home insurance, mortgages and savings):

  • British consumers lose around £4 billion a year to the loyalty penalty (or £11 million a day).

  • Eight in 10 people are paying a significantly higher price, in at least one of the markets, for remaining with their existing supplier.

This is the fourth super complaint Citizens Advice has made since being given the power in 2002. Its super-complaint on payment protection insurance (PPI) in 2005 helped to generate a huge win for consumers, with at least £36 billion returned to customers in refunds and compensation so far.

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CAB News 10 January 2020

Image result for loyalty penalty

Friday 10 January 2020

Yesterday two regulators, the Financial Conduct Authority and Ofcom, announced changes in their markets to help stamp out the loyalty penalty. We responded to both.



Can banks be forced to offer better savings rates? Watchdog considers imposing ”minimum interest rate” but experts fear race to the bottom

Mail Online UK, 09/01/2020, George Nixon

Under a consultation published yesterday by the Financial Conduct Authority (FCA), all savings account providers will have to set a single rate across all easy-access accounts which can be compared by consumers.

Christopher Woolard, the FCA’s executive director of strategy and competition, said the proposals ‘will prevent firms from gradually reducing interest rates over time and make them compete for all their customers.’

Gillian Guy, chief executive of Citizens Advice, said: ‘It’s been over a year since we submitted a super-complaint that found loyal customers are being penalised to the tune of £1.1billion a year when it comes to their hard-earned savings.

Gillian continues that the proposal could save people £260 million a year, and adds ‘The regulator must now hold its nerve and make sure these proposals are introduced to stop loyal customers being penalised.’

Banks will have to fix savings rates on easy access accounts helping customers earn £260 million more in interest

The Sun, 09/01/2020, Alice Grahnsloyal cu

Image result for banks have to fix savings rates

Banks will have to offer a fixed savings rate to all easy access customers, in a bid to stop banks gradually reducing rates for loyal customers.
It comes after Citizens Advice submitted a super-complaint on the loyalty penalty – in the mobile, broadband, home insurance, mortgages and savings markets – to the CMA.

Gillian Guy, Chief Executive of Citizens Advice, said: “It’s been over a year since we submitted a super-complaint that found loyal customers are being penalised to the tune of £1.1 billion a year when it comes to their hard-earned savings.

“It’s great to see the FCA are cracking down on the loyalty penalty and introducing a new single easy access rate, a move it predicts will save people £260 million a year.

“The regulator must now hold its nerve and make sure these proposals are introduced to stop loyal customers being penalised.”

Here’s the full Citizens Advice response to the FCA announcement on cash savings.


Energy customers hit with backdated bills

BBC, 10/01/2020, Lora Jones

In 2018 Ofgem banned companies from back-billing customers more than 12 months earlier. The ban was introduced to ensure customers wouldn’t be left struggling financially after receiving unexpected bills.

However in 2019 Citizens Advice said it helped 2,691 people in England and Wales with catch-up bills.

Gillian Guy, chief executive of Citizens Advice, said that a “large and unexpected bill is very worrying for anyone who receives it”.

Gillian added: “Customers who think their gas or electricity supplier may be billing them unfairly should contact the company directly in the first instance.”


Mobile users over-charged for phones could get compensation in new PPI-style scandal

Mirror, 04/01/2019, Stephen Hayward

Mobile phone giants charging for handsets that customers have already paid off could face a flood of PPI-style compensation claims says the Mirror.

The calls come ahead of new industry measures designed to cut phone bills. New guidelines will mean users automatically roll on to a cheaper sim-only plan, where they pay for airtime only, at the end of their contract.

A Citizens Advice report in 2018 estimated four million users had paid £500 million for sets they owned.


103 Stoke-on-Trent council tenants evicted for not paying their rent in past 12 months – and here’s where they lived

Stoke-on-Trent Sentinel, 06/01/2020, Richard Ault

More than 100 Stoke-on-Trent council tenants have been evicted from their homes over a 12-month period because they haven’t been able to pay their rent.

Simon Harris, chief executive of Citizens Advice Staffordshire North and Stoke-on-Trent, said: “Many of these people are in a precarious financial situation. We see people who have been evicted due to the bedroom tax and people who are still affected by the benefit cap.

“If people genuinely can’t pay and have made efforts then that is a different situation. The benefit changes have meant some people are always going to struggle.”

Council tenants struggling on Universal Credit in Humberside

BBC Radio Humberside, 06/01/2020

Ray Davies project leader in Citizens Advice Hull and East Riding’s debt team says that in the local area 80% of council housing tenants on Universal Credit are in rent arrears. Ray explains that this reflects the national picture.

Ray continues that the five-week wait makes it difficult to manage money, and coupled with the fact that people only seek to earn £73.10 a week, it means they’re starting off on the back foot. As a result people frequently turn to payday loan companies which offer loans with huge interest.

Ray says that the local charity has seen great hardship and there’s a notable link between the introduction of Universal Credit in an area and foodbank use.

In other news

The government has been urged to consider imposing restrictions on pay-as-you-go mobile phones to prevent their illegal use.

Housing-benefit errors ‘making families homeless’.

Only one in eight bosses who pay workers less than the minimum wage are caught by government inspectors.

Bosses of Britain’s leading firms will be paid more within three working days of 2020 than the average employees’ annual wage.

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CAB News 03 January 2020

Friday 03 January 2020

Our patron, the Princess Royal, has said volunteers “don’t need certificates to make a difference.”

And coverage of the consumer service’s top five issues of 2019 continues with a write-up in The Mirror.


Princess Anne

Princess Anne: ‘You don’t need qualifications to make a difference’

The Telegraph, 27/12/2019, Lucy Denyer

Princess Anne told the Telegraph she questions whether modern life is too obsessed with qualifications, especially when it comes to the many volunteers she comes into contact with.

“I had this discussion only yesterday!” she exclaims, “somebody said ‘do I need to have the right qualifications to be a volunteer’, and I said, by definition, you just want to be a volunteer!

“That’s the whole point! Having the qualifications is not necessarily what you’re looking for – you want somebody who is prepared to give up their time to help. And I think sometimes you need to get back to that point and say, thank you for wanting to help.”


Consumer five biggest complaints revealed by Citizens Advice

BBC, 31/12/2019

Used cars have again topped the list of consumer complaints after millions of people sought help from a charity for a variety of problems.

Citizens Advice, which runs a national consumer helpline and website, said it was contacted regarding 57,000 cases of issues with used vehicles.

The charity received 500,000 calls and 3.6 million website visits in 2019.

“We don’t want people to let their consumer issues follow them into 2020 as, more often than not, simple steps can be taken to avoid problems,” said Kate Hobson, of Citizens Advice.

These figures were also repeated on a BBC Radio 4 news bulletin.


How to conquer debt in 2020: Five key steps to take yourself out of the red in the new decade and wrangle control of your finances

Mail Online UK, 31/12/2019, Grace Gausden

Britons are £45 billion more in debt than they were a decade ago when it comes to personal loans and credit cards.

Half of those already in debt will be in a worse financial position after Christmas with 20 percent worried they will be unable to recover, according to research from YouGov.

Graham O’Malley, debt expert at Citizens Advice, said there are six simple steps you can take to start sorting out your debts. These include: working out how much you owe and can pay, prioritising your debts, creating a budget by adding up your essential living costs, and paying urgent debts.

80th Anniversary

Going Underground: Citizens Advice in World War II

BBC Four, Wartime Farm Christmas, 19/12/2019, 8:50pm (about 50″ into clip)

We end our 80th year with a mention for what must be one of our most unusual offices in a BBC Four documentary.

It was located in Chislehurst Caves on the edge of London, 22 miles of tunnels that became an underground town, housing 15,000 people sheltering from the Nazi bombing campaign during the Second World War.

There were so many people living underground for weeks, or even months at a time, that it raised the temperature in the caves. It didn’t return to normal for a year after the war.

As well as a Citizens Advice office, there was a chapel and a hospital. One baby was born underground and named ‘Cavina’ as she was born in a cave – her thoughts on this in later life remain unrecorded.


“I don’t have a computer… but a software firm still took my cash for years”

The Mail on Sunday, 22/12/2019, p.82, Toby Walne

The Mail on Sunday featured the story of a Suez veteran, who had payments taken from his credit card for several years, to highlight a relatively new type of scam in which unscrupulous firms take advantage of so-called continuous payment authorities to take money from people without their knowledge.

Gillian Guy told the paper: “A key concern is that rogue firms can use continuous payment authorities to take payments when they want, for as much as they want, and without a customer even being told it is happening.”

She added: “Four in ten people find it more difficult to cancel than to sign up to such a subscription deal – whether for computer software or something else. Often people are lured in because of a free trial and then forget all about it. You can end up paying for a service you do not want or even use.”

In other news

Three energy firms to pay £10.5m for failings over August blackout.

Millions of commuters will have to pay an average of 2.7% more for train tickets.