CMA's investigation of the Citizens Advice loyalty penalty super complaint - Which? response

Which? welcomes the opportunity to respond to the CMA’s investigation of the issues raised in the Citizens Advice September 2018 super-complaint. Which? believes that there are pricing practices in some markets that rely on lack of consumer engagement and clear action is needed to stop consumers from being harmed. Nevertheless price discrimination itself can be essential to markets functioning effectively and can deliver direct benefits to consumers.

We consider that intervention is warranted and necessary where price discrimination and lack of consumer engagement is the result of:

• companies making engagement unnecessarily difficult;
• vulnerable customers being unable to fully engage;
• companies exploiting consumers’ behavioural biases; and/or
• consumers being unaware that company “loyalty” is not always rewarded with lower fees and charges.

These cases significantly reduce the extent to which markets deliver the full benefits of competition to consumers and they undermine trust in markets more generally.