Longstanding and loyal customers to big businesses could be paying near £1000 more a year than new customers, a sum which is equivalent to four months food for the average household, research reveals.
According to a recent warning by Citizens Advice, loyal customers should be cautious surrounding the extra payments in everyday living expenses such as broadband, energy, home insurance, motor insurance, mobile and TV contracts, fixed rate mortgages, savings accounts, and travel insurance.
Investigations into “the price of loyalty” by Citizen’s Advice revealed evidence that suppliers use “unfair tactics” to prevent longstanding customers from finding a better deal. These tactics include failing to provide notice of when a contract is due to end, including complex terms and conditions within contracts, and creating hefty financial barriers to exit contracts.
With such tactics, many customers feel apprehensive when it comes to switching provider. However, figures reveal that mobile phone users can save £204 on average by switching their supplier at the end of contract. Similarly, motorists could save £134 by switching provider at time of renewal.
Citizen’s Advice found that customers aged over 65, with low incomes and/or without a university education are less likely to switch or unable to. A call for regulators to take action and reduce the number of people who pay the price for loyalty has been put forward.