ZOPA is supporting a ‘super-complaint’ against the Competition and Markets Authority (CMA) which aims to stop loyal bank customers from being overcharged.
National consumer protection charity Citizens Advice lodged the super-complaint on Friday, after calculating that UK consumers lose out on £4.1bn a year as a result of higher costs for mobile, broadband, home insurance and mortgages.
Meanwhile, banking customers lose out on an average of £877 a year as a result of what the charity describes as ‘loyalty penalty’. When it comes to savings accounts, this penalty adds up to £48 per year – with 71 per cent of savers unaware that they are missing out.
“Banks have been taking advantage of their most loyal savers for decade,” said Zopa’s chief executive Jaidev Janardana. “At Zopa, we believe in providing fair and simple products to our customers – so for the last 13 years we have always offered the same rate of return for both new and existing customers of our investment product.
“This commitment was further demonstrated by our recent rate increase by 0.6 percentage points to 5.2 per cent. We will do the same for our fixed term savings product when it launches.”
Citizens Advice noted that older people are more susceptible to paying the loyalty penalty. They are 18 per cent more likely to have the same savings account for four years, and a third of people over 65 are likely to have picked a savings account without shopping around. This compares with one in four for younger generations.
“It beggars belief that companies in regulated markets can get away with routinely punishing their customers simply for being loyal. As a result of this super-complaint, the CMA should come up with concrete measures to end this systematic scam,” explained Citizens Advice chief executive Gillian Guy.
The CMA said it will consider the concerns raised and plans to publish a response within 90 days. As a result, it may recommend that the government changes legislation or consumer enforcement action may be taken.