Last week, the government said it would soon give regulators (primarily the sleepy FCA and the slightly more alert Ofcom) the right to fine those found guilty of overcharging loyal customers.
Yet it could be a while before anything happens on this front. Why? Well, first, this government seems about as unstable as a dining room table at my local pub, so it is highly likely that any intended legislation will ever see the light of day.
Second, even when empowered with its new fining rights, I can hardly see the FCA acting promptly. After all, alertness is not something it is renowned for; it is as docile as the 16-year-old cat (Pumpkin) that I recently befriended.
Admittedly, Ofcom has progressed matters a little. From the start of this month, a new ‘text-to-switch’ regime has been introduced.
This means millions of people fed up with their current mobile phone deal will be able to dump their provider by text and take up with a new network the next day. Good on Ofcom.
Yet on the FCA front we have heard nothing, not even the occasional stifled yawn. Embarrassing, especially when the FSCP has just recommended that the regulator should introduce rules requiring long-standing customers to be automatically upgraded to better deals if they are falling foul of the loyalty penalty.
The FCA’s response to the FSCP’s recommendation? Silence. It reminds me of The Tremeloes’ 1964 hit “Silence is Golden”.
The splendid Gillian Guy, chief executive of Citizens Advice, recently wrote an opinion article on the loyalty penalty for The Mail on Sunday.
In it she expressed her “disappointment” at the lack of progress in tackling the issue.
“Time is ticking,” she opined. “The FCA and Ofcom need to step up and show us how they are going to stop companies exploiting their loyal customers and put an end to this systematic scam.”
So far, Ofcom has stepped up to the mark with ‘text-to-switch’. The FCA has not. It is time for those officials who reside at the regulator’s plush headquarters in Stratford to show some endeavour and bring the loyalty penalty scandal to an abrupt end, in the best interests of consumers and for the reputation of the financial services industry.
Jeff Prestridge is personal finance editor of The Mail on Sunday