VICTORIA BISCHOFF: Shame on the regulator for allowing insurers to continue ripping off loyal customers
For more than a decade, Money Mail has campaigned to stop insurers mercilessly ripping off loyal customers.
This practice of hiking premiums at renewal – known as price-walking – sees customers fleeced out of around £1 billion a year.
And it’s almost always the oldest and most vulnerable, who are often not online, who pay the highest price.
Insurance rip-off: The ruthless practice of hiking premiums at renewal – known as price-walking – sees customers fleeced out of around £1bn a year
In 2018 the City watchdog at last promised to stamp out the racket, and we thought an end to the loyalty penalty was in sight.
So it beggars belief that insurers have succeeded in convincing the financial regulator they need more time to ‘update their systems’.
Apparently almost all firms said it would be impossible to implement the changes within four months.
They claimed they needed at least until the end of the year — with the pandemic a handy excuse to cash in a little longer.
The truth is insurers bank on this trickery to boost their bottom lines. Just look at how quickly Saga’s share price tumbled in 2019 after it announced plans to offer loyal customers a fairer deal for evidence of this.
Meanwhile, the sleepy Financial Conduct Authority has not even made a final decision on the exact details of its pricing rules.
These, it says, will be announced at the end of May, with any changes coming into effect by the end of the year at the latest.
‘We do not want to see consumer harm continue into 2022,’ the FCA adds.
Seemingly it has no issue with allowing consumer harm to continue throughout 2021. The loyalty penalty is one of the biggest rip-offs perpetrated on consumers — and the financial regulator has known about it for years.
To bow to pressure from profit-hungry insurers and delay action yet again is unforgivable.
Road to recovery
As we report today, it has been a roller coaster year for our personal finances.
Almost one year ago to the day, the housing market was forced to all but shut for three months.
The UK and U.S. stock markets had suffered their worst day since the financial crisis, and interest rates had plunged to a 327-year low.
But nine months (and a generous stamp duty holiday) later, property prices are at an all-time high. And the stock markets are in recovery mode.
Making important financial decisions, such as buying a house or working out when to retire, is stressful at the best of times – let alone during a pandemic.
What families need now is a little certainty and a predictable tax regime that we all understand.
So if any changes are made in response to the slew of tax consultations launched yesterday, it is crucial they focus on simplifying the system – and don’t just add more complexity.
NS&I’s top boss Ian Ackerley received quite the grilling last week.
He admitted to the Treasury Committee that the Government’s savings arm is still wading through thousands of complaints. Amid this chaos, Mr Ackerley also apologised profusely for attempting to axe Premium Bond cheques.
It’s a shame he didn’t abandon plans to phase out the popular prize cheques altogether. He remains adamant most customers prefer to receive their winnings directly into their accounts.
Perhaps he should re-read the mountain of letters I sent him from Money Mail readers threatening to cash in their bonds.
My local M&S foodhall has gone full self-service – and I hate it.
Its biggest mistake was failing to ensure all its automated checkout machines can weigh items.
Last Saturday this caused a queue of shoppers clutching bananas to form in front of the poor staff member looking after a dozen checkouts.
I’m all for modernisation – but it shouldn’t be at the expense of consumer choice.