The
Financial Conduct Authority has issued a discussion paper on fair pricing in
financial services (DP18/9). The paper
addresses loyalty and inertia pricing, setting out the FCA’s framework for
assessing fairness and harm caused by discriminatory pricing. The paper also considers potential remedies.
The
FCA intends that the paper will prompt a public debate on the issues. These
issues are relevant particularly to the FCA’s general insurance market study.
The
FCA is seeking views, particularly, on two practices. First, firms charging different prices to
different consumers based solely on differences in consumers’ price sensitivity
(also known as ‘price discrimination’). Second, firms charging existing
customers higher prices than new customers (sometimes referred to as ‘loyalty
pricing’ or ‘inertia pricing’).
The
FCA seeks comments on the discussion paper by 31 January 2019.
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