Here's an extreme example of the dreaded “loyalty penalty”.
Andrew Brass was discussing home insurance with his parents Harry and Nicole and discovered that they were paying £875 annually.
He found that their premium had being going up by an inflation busting 7% most years for more than decade.
He shopped around and got an alternative quote of just £129.
“It is my belief that my parents have been over-charged by about £7,000 in total,” said Andrew, from Bilston in the West Midlands.
“They would have continued to be over-charged without my involvement.”
His parent's policy was with Aviva, arranged through The Royal London.
When he complained, Royal London told him that it was only the “introducer”, and Aviva wrote back: “We do not advertise that we provide the cheapest quotation.”
I asked Royal London if it wanted to comment, and it forwarded me to Aviva for a response, which said: “We are currently working closely with the Financial Ombudsman Service to get a fair and just outcome for Mr and Mrs Brass as soon as possible.”
As soon as possible? This complaint dates back to 2014.
The Ombudsman Service apologised for the delay, saying it was close to a resolution.
“Over recent years we have uncovered some blatantly unfair pricing practices in insurance, especially among those more vulnerable consumers who are known to be less likely to shop around, exploiting their loyalty to trusted brands,” a spokesman said.
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“Following our investigations more than 200 consumers have now had fair compensation.”
That was in February. Now I'm delighted to say that after more than four years Harry and Nicole have reached a settlement with Aviva.
They have been awarded £4,046 – compared to Aviva's initial offer of just £1,200.
“We believe this to be a fair offer,” said Andrew.
“On behalf of my parents may I thank you for your involvement in this case, without your help we would still be waiting for it to be solved."
