A new investigation into how much we pay for financial services and products concludes that the poorest in society pay more for financial services and that across the UK consumers are being ripped-off by a total of £11 billion a year.
The report says that this means every household is paying around £430 a year in charges and fees for financial services and it says that more competition is needed to lower this figure.
The consumer investigation, commissioned by the Labour Party found that banking and the utilities sector, along with car repairs scored the worst for how end users viewed the consumer experience.
The investigation concludes that fines should be used to refund consumers who have suffered financial loss rather than go to the Treasury and that consumers should be able to take class action to apply for financial redress in the event of major financial scandals such as the mis-selling of payment protection insurance (PPI).
And the findings are published as it has been revealed that banks, including those that received a bailout from the taxpayers who are their customers are still encouraging staff to push products onto consumers so that they receive commission.
Lloyds TSB has admitted that four out of every ten employees can earn extra payments if customers buy extra products such as insurance policies or current accounts that charge a fee.
The investigation is being led by the secretary general of Co-operatives UK, Ed Mayo, who said: “In the financial services sector, drawing together estimates where they exist - on mis-selling, hidden charges and lack of competition - I have estimated the annual consumer detriment in financial services to stand at around £11billion per annum. That is £430 per household across the UK.”
The report concludes that poorer people pay on average £1,289 a year more for financial goods and services than people on average incomes. This is because they find it more difficult to qualify for cheaper credit and loans.
The most common complaints were for poor quality of service, at 20 per cent and defective goods, at 17 per cent.
Shadow Business Secretary, Chukka Umunna said: “In light of successive scandals which have eroded the confidence of consumers - both individuals and businesses - we need to change the rules of the game to stop people getting a raw deal, restore trust and back responsible businesses.”