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Citizens Advice pleased FCA cracking down on insurance loyalty penalty

22 Medi 2020

In response to the Financial Conduct Authority’s (FCA) announcement, Dame Gillian Guy, Chief Executive of Citizens Advice, said:

“It’s nearly two years since we submitted a super-complaint on the loyalty penalty and we’re pleased to see the FCA is proposing strong action to crack down on this systematic scam.

“We’re especially happy to see it tackling price-walking - gradual year-on-year price increases - and making companies automatically switch their customers to better deals.

“It’s important to remember these are proposals and have an introduction date of late 2021 which is a long way away. It is essential that the FCA confirm and implement these quickly to potentially bring insurance customers' prices down by £370 million a year.”


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, in December 2018, said it agreed and had found damaging practices by firms which exploit unsuspecting customers. The CMA said it wanted to see urgent action. 

In April last year the charity found that home insurance companies make 100% of their profits from the loyalty penalty.

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 £38 billion returned to customers in refunds and compensation so far.

For more information contact: Laura Albrey
Tel: 03000231 313
Out-of-hours contact number: 0845 099 0107

Notes to editors

  1. The loyalty penalty super-complaint can be found here

  2. The CMA’s press response to the super-complaint can be found here

  3. The Loyalty Penalty Cross Sector Report can be found here.

  4. The press release that finds that home insurance companies make 100% of their profits from the loyalty penalty here.

  5. The PPI figure is sourced from the FCA

  6. Citizens Advice is made up of the national charity Citizens Advice; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.

  7. Our network of charities offers impartial advice online and over the phone, for free. 

  8. We helped 2.8 million people face to face, over the phone, by email and webchat in 2019-20. And we had 34.5 million visits to our website. For full service statistics see our monthly publication Advice trends.

  9. You can get consumer advice from the Citizens Advice consumer service on 0808 223 1133 or 0808 223 1144 for Welsh language speakers.