A pack of snarling industry and financial watchdogs were off the leash today with the Competition and Markets Authority, Ofcom, the Office of Rail and Road, and the Financial Conduct Authority all issuing threats to investigate or regulate.
It is almost as if they wanted to empty their in-trays ahead of a looming deadline. But if the desk-clearing means that regulators’ minds can now start turning to mince pies and crackers they did not bring much festive joy for some of the companies likely to be affected. Ofcom’s threat to ban confusing mid-contract, inflation-linked tariff hikes — long overdue — knocked around £1 billion off the value of the telecom sector today.
There was also a big reaction in the broking and fund management sector where firms have been warned about the widespread, and increasingly lucrative, practice of “double dipping” — holding back interest on clients’ cash balances, and often also charging them a fee for the pleasure of sitting on their hard earned cash.
The huge and growing cost of this often opaque small print condition was highlighted by my colleague Simon English in an investigation by this paper last month.
In June alone the 42 firms investigated by the FCA earned £74.3 million from this unwelcome practice, equivalent to an unacceptable annual harvest of nearly £900 million.
Our own investigation suggests the true figure could be as much as £1.3 billion. Companies have to make a buck but it is good to see the FCA, and its fellow regulators acting in a muscular way to rein in excesses.
Consumers have had a pretty tough couple of years. It is only reasonable that companies play fair with them and do not use loopholes and sharp practices to increase the cost of living burden any more than is necessary.
