Government will review how data can save consumers money in ‘ripoff’ markets

Research shows a ‘loyalty penalty’ in markets such as mobile and broadband is costing households £877 per year

Broadband connection

The government has launched a cross-departmental review to examine how technology such as comparison tools and open banking can prevent consumers from being "ripped off".

The Smart Data Review, comprising ministers and the CEOs of industry regulators such as Ofgem and Ofcom, will focus on how data portability can improve the customer experience, and accelerate the development of emerging technology.

"Britain has long been a world leader in ensuring that markets work in the interests of consumers, but many loyal customers are still paying more than they need to," said consumer minister Kelly Tolhurst MP.

"The Smart Data Review will enable the development of new technologies to make it easier to access the best deals, and follows tough action we have taken in the energy market through our price cap which will protect over 11 million households from poor value default tariffs this winter."

Tolhurst will chair the review alongside the Department for Business, Energy and Industrial Strategy (BEIS) and the Department for Digital, Culture, Media and Sport (DCMS), and industry regulators.

Advertisement
Advertisement - Article continues below

Their findings and next steps will be outlined to the newly-established Consumer Forum, which Tolhurst also chairs, in the first half of 2019.

It has been announced just as Citizens Advice published research showing loyalty to utility companies, such as internet service providers (ISPs), is costing customers 4.1 billion every year. The "loyalty penalty" is the equivalent of 877 per year and 3% of an average household expenditure.

Citizens Advice has also launched a 'super-complaint' with the Competition and Markets Authority (CMA), and called for the regulator to outline how the problem across the five markets examined will be fixed. These markets include mobile, broadband, home insurance, mortgages and savings.

"It beggars belief that companies in regulated markets can get away with routinely punishing their customers simply for being loyal," said Citizens Advice's chief executive Gillian Guy.

"As a result of this super-complaint, the CMA should come up with concrete measures to end this systematic scam."

"It's completely unacceptable that consumers are still being ripped off for being loyal to companies they rely on every single day. Regulators and Government have recognised the loyalty penalty as a problem for a long time - yet the lack of any meaningful progress makes this super-complaint inevitable."

The Smart Data Review will examine the scope for innovations such as open banking, midata and new data protection laws to serve as a platform to boost competition, and modernise markets in general.

The terms of reference also cite the newly-introduced General Data Protection Regulation (GDPR) for strengthening people's data rights; in that consumers have increased ownership. This, the government says, can be integrated into plans to modernise consumer markets.

Featured Resources

The IT Pro guide to Windows 10 migration

Everything you need to know for a successful transition

Download now

Managing security risk and compliance in a challenging landscape

How key technology partners grow with your organisation

Download now

Software-defined storage for dummies

Control storage costs, eliminate storage bottlenecks and solve storage management challenges

Download now

6 best practices for escaping ransomware

A complete guide to tackling ransomware attacks

Download now
Advertisement

Most Popular

Visit/security/identity-and-access-management-iam/354289/44-million-microsoft-customers-found-using
identity and access management (IAM)

44 million Microsoft customers found using compromised passwords

6 Dec 2019
Visit/cloud/microsoft-azure/354230/microsoft-not-amazon-is-going-to-win-the-cloud-wars
Microsoft Azure

Microsoft, not Amazon, is going to win the cloud wars

30 Nov 2019
Visit/network-internet/wifi-hotspots/354283/industrial-wi-fi-6-trial-reveals-blistering-speeds
wifi & hotspots

Industrial Wi-Fi 6 trial reveals blistering speeds

5 Dec 2019
Visit/business/policy-legislation/354282/boris-johnson-suggests-uk-will-side-with-us-over-huawei
Policy & legislation

Boris Johnson suggests UK will side with US over Huawei exclusion

5 Dec 2019