Consumers could soon find that unfair ‘loyalty penalties’ are a thing of the past as the government launch the Smart Data Review.
The review will make it easier for consumers to get good deals on essential services like broadband and banking.
It will look at speeding up the development of innovative new services such as automatic switching apps to make bills cheaper.
Citizens Advice have revealed that customers who stay loyal to their providers are losing out on over £4 billion a year.
Citizens Advice research also shows the loyalty penalty is disproportionately paid by vulnerable consumers, such as older people and people with mental health issues. These groups are particularly likely to struggle with switching.
The government wants to ensure that all consumers can benefit from these types of innovative new services, not just those who are digitally savvy and regularly look to switch providers.
The Review will report to the newly established Consumer Forum, chaired by Consumer Minister Kelly Tolhurst, which brings together ministers and CEOs of sector regulators. The government will consult with stakeholders including developers, regulated companies, consumer organisations and charities throughout the review.
Mrs Tolhurst said: “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.
“It is our modern Industrial Strategy in action, ensuring markets provide consumers with keen prices and quality products and services through cutting-edge innovation.”
The government’s Modernising Consumer Markets Green Paper highlighted the challenges that consumers face in regulated markets such as financial services, energy and telecoms.
For example, consumers can struggle to stay on top of their essential service contracts and find it difficult to identify the best deal, and those that do not switch sometimes pay considerably more.