It’s essential that companies offer fair, honest services to prevent customers from falling victim to false claims and non-truths. That’s why the UK’s Financial Conduct Authority (FCA) regulates all activity on the financial scene and advises companies on how to communicate their products and services. The government agency monitors all marketing activity (whether business-to-business, business-to-business-to-consumer, or direct-to-consumer) and has been known to fine companies that don’t market their products or services fairly.
Industry-leading companies like the multi-award-winning home service provider Utility Warehouse (UW) ensure they represent their services clearly and in line with FCA practices. The legislation protects all consumers, which means all messaging must be easy for everyone to understand.
FCA price walking legislation
Price walking is a widespread issue that involves insurance providers raising the cost of their existing customers’ premiums year on year. This can leave loyal customers who don’t shop around for cheaper deals paying more than new customers. However, in May 2021, the FCA updated their regulatory scope to address price walking directly by changing the ways insurance providers can incentivise new customers.
These price walking regulations aim to improve fairness for consumers across the board. Now, insurance providers that offer home, motor, or other forms of general cover* can’t offer exclusive incentives for new customers. Instead, companies that offer cash and non-cash offers (like cashback, X months free, discounts, vouchers, and gift cards) must make these offers available to both new and existing customers.
This way, customers who stay with their insurance providers year on year won’t be penalised for their loyalty. The FCA predicts that the new regulations will save consumers around £4.2 billion over 10 years and will save people from having to shop around for better insurance deals to beat new-customer incentives.
*These regulations don’t apply to life, pet, or health insurance, which insurance providers structure differently.
Short-term value incentives for new customers
There are some exceptions to the updated legislation. For example, companies may still offer short-term value to entice new customers (such as carbon offsetting initiatives, toys, or prize draws for a percentage chance to win back the premium returned). These marketing strategies allow companies to offer exciting sign-on incentives that don’t change the overall nature of the deal or leave existing customers paying higher premiums than new customers.
Utility Warehouse’s commitment to fair pricing
As the UK’s only genuine multiservice provider, Utility Warehouse is committed to offering reliable home services at competitive prices. Every year at renewal time, UW sends out a customer policy to all nine insurers on its panel. During this time, insurers rebid, competing with policy pricing. Then, customers can choose between nine competitive services from different insurers/underwriters.
UW keeps all product features and benefits the same so customers can get the best prices from UW’s panels for the same cover every year. Thanks to this product structure, UW has never used price walking tactics. Instead, the multiservice provider’s customers make more savings the more home services they bundle into great value monthly packages. UW offers several home services for customers to combine, including mobile, broadband, energy, and insurance services.
The FCA’s new regulations don’t impact the way that UW offers insurance as the company’s panel of insurers (who compete on price both at the start of cover and every year at renewal) ensures customers always receive a competitive price for the same great UW cover.
About Utility Warehouse
UW is committed to always providing top value for its customers and has spent more than two decades helping people find the right home services for their needs, all while saving them time and money. UW customers can monitor their utilities in one place and leave UW to arrange great value renewals. Should they need support, they only ever need to contact one customer service team on one phone number.