END OF THE GREAT LOYALTY RIP-OFFS

Crackdown on £4bn scandal

WATCHDOGS are cracking down on firms ripping off loyal customers by £4billion a year.

They want to stop existing customers being charged more than those newly signing up for insurance, mortgages, broadband and phone packages.

Reforms include price caps to protect the vulnerable, making it as easy to cancel a contract as to enter it, and publishing a yearly list of suppliers’ loyalty penalties. Martin Lewis, founder of MoneySavingExpert.com, said: “Those unable to engage in competition need protection. If a 90-year-old who’s not on the web can’t switch, the market needs fixing.”

Stealth prices rises, big exit fees and tough cancellation processes were found in a probe by the Competition & Markets Authority, prompted by a “super complaint” from Citizens Advice.

Gillian Guy, chief executive of Citizens Advice, said: “The loyalty penalty costs customers £11million a day. The Government and regulators must end this systematic scam.”

Five million drivers whose insurance was automatically EXPERT Martin Lewis renewed this year overpaid by £1.4billion in total, according to comparison website Gocompare.

And householders who stay loyal to the same home insurance provider for five years pay an average 70% more than new customers, found the Financial Conduct Authority.