On 31 October 2018 we published a Discussion Paper on the fairness of certain pricing practices in financial services. The judgement of when price discrimination is fair is not always straightforward. We want to take into account stakeholder views on our approach to deciding whether and how to act in the markets we regulate.
We are launching a public debate on the fairness of certain pricing practices in financial services. This is a complex issue and we want to take into account stakeholder views on our approach so that we are confident that whatever action we take on difficult cases is in the public interest. That is why we are publishing this Discussion Paper and launching a public debate on the topic.
We are focusing the debate on the following pricing practices:
- firms charging different prices to different consumers based solely on differences in consumers’ price sensitivity (also known as ‘price discrimination’)
- firms charging existing customers higher prices than new customers (sometimes referred to as ‘loyalty pricing’ or ‘inertia pricing’)
We have concerns that these pricing practices can potentially disadvantage some consumers significantly, in particular the most vulnerable and least resilient consumers.
This discussion paper is published alongside the findings of our diagnostic work on pricing practices in the retail general insurance sector and the terms of reference for a market study on general insurance pricing practices.
This version of the Paper has been amended to reflect a correction in Figure 2 from an earlier version.
Who this applies to
We are interested in collecting views on the issues in this discussion paper from across society, from consumer groups and from retail financial services firms.
Please send us your comments by 31 January 2019.
You can respond in the following ways:
- complete the online response form
- email: [email protected]
- write to: Chris Gee, Strategy & Competition Division, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN
We will be open for discussion in November and December and will be hosting roundtable events with key stakeholders, including consumer bodies and parliamentarians, in January. We will issue invites in due course. For more information please email [email protected]