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Citizens Advice response to CMA announcement of 6 month extension

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.