Citizens Advice responds to Ofcom’s announcement on mobile phones

  • -

Citizens Advice responds to Ofcom’s announcement on mobile phones

Friday 26 July 2019

In response to Ofcom’s announcement on mobile phones Gillian Guy, Chief Executive of Citizens Advice, said:

“Today is a good day for loyal mobile phone customers who will save millions on their contracts each year.

“We submitted a super-complaint back in September as the loyalty penalty is simply unfair – and 89% of people agreed with us.

“Most mobile phone providers have now realised the game is up – they cannot take advantage of their loyal customers.

“Three needs to step up and if it doesn’t, then stronger action is needed to make these changes compulsory. If Ofcom is unable to do this, then government needs to intervene.”

BACKGROUND:

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 the regulator to consider how the problem can be fixed. The CMA’s response to our super-complaint in 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 £4.1 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.

  • The loyalty penalty across the five markets is, on average, £877 per year

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 £35.7 billion returned to customers in refunds and compensation so far.