Loyalty penalty still being paid by consumers

According to a recent survey by Which?, consumers are continuing to be overcharged in return for their loyalty – otherwise known as the ‘loyalty penalty’. The consumer site surveyed over 1,000 of its own members to question them about their usage of broadband and TV packages, such as how they pay for their service, the length of time they’d been with their supplier and whether they’d tried to obtain a cheaper price by haggling.

Loyalty penalty

The results were the same as across other utilities – if you switch after the end of your first contract period, you pay less. If you continue with the service automatically, or don’t negotiate the price at the point of renewal, you end up paying more. Which? Found that 40% of customers had remained with their supplier for more than 10 years.

According to Which?, Sky TV repeat customers pay much more. The cheapest Sky deal for both broadband and TV is £360 a year. Those Sky customers who hadn’t attempted to negotiate or threatened to exit their contract were paying on average £1,000 a year. Even similar Virgin Media customers were paying an average of £960 a year. These people are clearly paying the loyalty penalty.

I’m thinking of leaving – can I get a deal?

Some tips for consumers suffering the loyalty penalty. Even if you like your current service, you can negotiate. Wait until you are reaching the end of your contract period (sign up with Bills Dashboard and get a renewal alert four weeks prior) – then call your provider and mention that you are considering leaving. They will put you through to a customer retention team. Yes there are such teams. These teams are in place to keep you as a customer. They will offer you discounts, cheaper packages, new contract offers and other incentives just to keep you as a customer. Make use of it.

Bills Dashboard

Of course, you can simply just walk away, terminate your contract and save money. If you have bundled your broadband with your TV, this makes it harder, but find a cheap broadband deal (you can get fibre now for just over £20 a month) and watch Sky through Free Sat. Keep the card in the box and it still works. If you want the ability to record programmes, pay £10 a month with Sky for that feature.

And if you’d like reminders about all your bills, and ways to find cheaper deals, why not get a free account on Bills Dashboard, where all the organising has been done for you. It’s the most organised you’ll ever be!

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