[Poll] Does Loyalty Tax exist?

Trying2SaveABuck on 18/10/2019 - 15:17
Last edited 18/10/2019 - 15:18

I read in the paper that CEO Matt Comyn CEO of CBA saying there was no such thing as a ‘loyalty tax’ on current home loan customers in which new customers where getting better deals in customers who have been with the bank for years.

Now personally call a load of bullshit and these fat cats will do anything to lie to keep a dollar.

But it got me thinking ‘loyalty tax’ – which basically means sticking with a company/business that looks after new customers better then current ones is becoming common practice.

This is true not just with home loans but with internet, mobile plans, insurance etc

Do you think a ‘loyalty tax’ exists in Australia?

Or is it just a ‘lazy tax’ because people aren’t motivated to change providers to get a better deal?

Disclaimer: Me personally i constantly shop around for better deals that suit my needs however i know this isnt possible for everyone and i have a lot of 'elder' patients that get stiffed on expensive power cost, phone plans, internet plans etc - a good example would be my 78 year old lady who telstra signed her up to a 99pm plan for a phone she has no idea who to use for 24m and all she wanted was a plan she could call and send texts….she didnt even need a new phone!

Article
https://www.theaustralian.com.au/subscribe/news/1/?sourceCod…

Poll Options

  • 69
    Yes - Loyalty tax exists (existing Customers generally dont get looked after once signed up)
  • 23
    Yes/No - It is more of a lazy tax people should shop around
  • 1
    No - no such think as a loyalty tax
Financial

Comments

  • EightImmortals on 18/10/2019 - 15:29
    +2

    Definitely. I was with NRMA for over 20 years, had one no fault claim back in the 90's and nothing since. It got to the point where their premiums were around double their competitors and they would not budge. So I changed companies. Have noticed it on other policies too and often a phone call/query when it's time to renew gets things fixed.

    • crentist on 18/10/2019 - 20:34

      lol nrma is a rip. my dad was in a pretty senior position in one of their subsidiaries and would say that even within the organisation no one uses nrma for themselves because it was just a crap deal

      I think it had something to do with rusted-ons valuing the name too much

  • scrimshaw on 18/10/2019 - 15:34

    Yeah, insurers know when they send out their annual renewal notices, most of us won't bother checking if we can get a better deal. We just assume they'll look after us better the longer we stay with them.

    ABC's The Checkout covered this topic a few years back
    https://www.youtube.com/watch?v=VDpJ3S8z0I0

    And it's not just insurance, telecommunication providers, ridesharing companies, grocery / food delivery services typically only do deals to attract new signups, but once you're joined you'll typically receive offers that are much less attractive. Or none at all.

    • spackbace on 18/10/2019 - 15:51
      +1

      Foxtel would be 1 of the worst too

  • brad1-8tsi on 18/10/2019 - 15:51
    +5

    GIO supervisor told me that "we will give greater incentives to onboard a new customer than retain an existing one". this during the course of a discussion where I was questioning why using my neighbour's adress resulted in a $200 cheaper premium.

    • o53djz7qTPY4der on 18/10/2019 - 20:20
      +1

      I had the same response from Gio with my home insurance.

      I hung up and just signed up as a new customer.

  • try2bhelpful on 18/10/2019 - 16:13
    +1

    Yeah, this issue always puzzles me as well. Given you have a customer, that has proven to be reliable, why would you annoy them by treating them badly. They would be doubly hard to get back once they leave in a huff. In the long run behaving like this just causes people to constantly shift and the companies are incurring the onboarding/exiting costs. I understand the “lazy tax” that applies to so many areas but, frankly, the CBA guy is an idiot for not finding a better answer to the question.

    • ozhunter on 18/10/2019 - 16:26

      The long-term customer would have been treated the same as they have always been. I think it's understandable that company's give offers to new customers in order to hopefully keep them as a customer and I'd say most people think that's reasonable.

      • try2bhelpful on 18/10/2019 - 18:07

        I don’t think loyal customers think this is reasonable, they think they have been propping up the bottom line of these companies for a long time and they should be getting preferences for this. What the companies are doing, at the moment, is encouraging churn. Once people get annoyed they are much less likely to come back.

  • Donaldhump on 18/10/2019 - 16:34
    +1

    why would a company retrospectively give an offer to lure you in when you are already a customer, its up to you to move, and if they dont offer u the same deal then to churn. i call it a lazy tax

    if you ran a business, you would do the same.

  • markathome on 18/10/2019 - 16:34
    +1

    I'm in an embedded electricity network. We're not looked after at all BUT there is a legislation that limits how bigger rip-off it can be. However the electricity company (Origin) discovered it can do the same with the provision of hot water and gas. I am paying per litre of hot water used and, I suspect, significantly more than anyone on this forum. So do you really believe loyalty taxes don't exist?

    Also I'm also paying more for Internet (triple-whammy hey?) because my fibre is provisioned by OptiComm not NBN but I complain less about that because NBN fibre simply wasn't ready when the complex was built.

  • garetz on 18/10/2019 - 16:54

    Its simple, as long as your lending provider doesnt give the existing customer the full rate cut, over time you will be much worse off than a new customer who gets a rate based on the best available rates at the current time for a new loan.

    You will always get ripped off the longer you stay with any of them.

  • Almost Banned on 18/10/2019 - 17:17
    +3

    I recently received a car insurance renewal notice.
    I searched the exact same details WITH THE SAME INSURER online and got a quote several hundred dollars cheaper.
    I simply took out the new policy with the same insurer.
    There is definitely a tax for not shopping around.

    • Muffinman01 on 18/10/2019 - 22:11

      Last time my insurance renewal came through I found the same thing.

      I called them up to query it, and magically they were able to drop the price. When I pressed for an explanation there was none, just 'have a nice day sir'.

  • Camm90 on 18/10/2019 - 18:08

    Most car insurance policy's I do a new quote every time it's due to renew. I recently did one with budget direct and it actually worked out a little cheaper with my renewal notice.
    Though, 9 times out of 10 it's more expensive. Its surprising how many people just pay their renewal notices without checking around.

    • [Deactivated] on 19/10/2019 - 09:56

      Have found this with 3rd party car insurance for decades. Renewals go up every year. Unfortunately it's a lengthy job to go through 20-50 online quotes to save at least 20 or 30 dollars a year. So I literally have had no car insurance for two vehicles for two years, because of this effective trap. $500 saved so far but stupid move by me.

  • yoonibear on 18/10/2019 - 18:57

    Definitely. Off the top of my head - car insurance and energy bills.

  • DeafMutePretender on 19/10/2019 - 00:31
    +1

    Companies can't expect any loyalty from customers and vice versa. This is where capitalism works best: companies do what's in their best interests and so should customers. EG. if you're with the big 4 banks despite smaller banks offering better deals, you're just a useful sucker.

  • [Deactivated] on 19/10/2019 - 10:02

    Capitalism 101: Shop around, no one's your friend.

  • zzzsianzzz on 19/10/2019 - 16:07

    Banks look after their owners over customers anyday. They are for profit. The social responsibility bit is for marketing and BS. Bankwest says for bank stuff on tv. Lol.

    They get back their money from other places they lost after financial planning scandal to get back to their record profit again! You see more truth in court on tv, no scripts, than they on interviews and have their staff prepare for those questions before interview.

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