Statement on the CMA’s response to the Citizens Advice super-complaint on excessive prices for disengaged consumers

The Competition and Markets Authority (CMA) has published its response to the Citizens Advice super-complaint on excessive prices for disengaged consumers. The super-complaint covers several markets, including insurance, cash savings and mortgages.

The issue of longstanding customers being charged more for some financial products than new customers is a priority for the FCA. The FCA welcomes the CMA’s review of this important issue and agrees that harmful practices should be tackled robustly. We will continue to engage with the CMA on this as we consider how to act on its recommendations.

The FCA has ongoing work on cash savings, mortgages and general insurance (GI) pricing practices looking at how to improve outcomes for consumers, including those who are long-standing. We will consider all options to achieve this, including price interventions where appropriate.

Christopher Woolard, Executive Director of Strategy and Competition at the FCA, commented:

'The treatment of long-standing customers remains a priority for the FCA. We have worked closely with the CMA since they received the super-complaint. We will continue to do this. It is important that this issue is tackled and harmful practices are stopped.

'We expect firms to look after the interests of all customers and treat them fairly, whether they are new or longstanding. Where we have concerns about conduct by firms, we will explore all options to address this using the full range of our powers.'

Notes to editors

  1. In October 2018, the FCA launched a market study into how GI firms charge their customers for home and motor insurance. The study is looking at consumer outcomes from pricing practices, and the fairness and impact on competition from pricing practices. 
  2. In 2017, the FCA introduced rules to increase transparency and engagement at renewal in GI markets. These rules aimed to encourage some consumers to check their insurance cover and pricing and shop around for the best deal at each renewal. The FCA is evaluating the impact of these rules and this will inform its consideration of potential remedies in the market study.
  3. In January 2015, the FCA published the final findings of its cash savings market study and its proposed remedies to improve the information made available to customers and to make it easier to switch. Following this work, the FCA published a discussion paper in July 2018 on alternative options to address harm to longstanding customers, including introducing a basic savings rate in this market.
  4. The FCA’s mortgages market study interim report, published in May 2018, set out a number of proposals aimed at helping customers find the best-priced suitable mortgage deal and helping longstanding borrowers who do not and cannot switch (the latter often referred to as ‘mortgage prisoners’).