Elderly and vulnerable customers are routinely overcharged by utilities and insurance companies in a hidden scandal brought to light today by one of the country’s top financial services executives. Unfair practices put them at risk of not being able to afford food and heating, he warns.

Michael Donald, former director of Visa UK, said he was stunned to discover hundreds of pounds overcharge when he carefully checked the direct debits on his 79-year-old mother’s accounts.

“There is a lot of mis-selling of services to seniors, who are often unable to effectively verify online statements and direct debits,” he said. “Organizations should review the accounts of consumers who have reached retirement age. In the current crisis, they have a duty to ensure that the products sold are suitable for their use. »

Donald was asked by his mother, Carole Grant, who lives near Chichester, to check on his financial affairs following the death of his longtime partner. He discovered he had been sold two appliance insurance policies on a £330 Indesit washing machine that came with the standard warranty. The total cost of the two policies was over £500.

A first policy was bought from leading home goods insurer Domestic & General in May 2018 for £5.49 a month, and another three-year policy sold by Repair & Assure for the same appliance in September 2020 for £225.

The Information Commissioner’s Office (ICO) and consumer group Which? have previously raised concerns about the sale of appliance insurance to elderly people who may be vulnerable and the purchase of unsuitable policies.

Sam Richardson, associate editor of Who? Silver, said: “Which one? warned of companies that have been cold calling and charging vulnerable customers inflated fees for device coverage for many years. We have received hundreds of reports from family members who find elderly parents paying hundreds or even thousands of pounds a month for worthless blankets.

Donald’s analysis of his mother’s bills also revealed that Shell Energy, his broadband, energy and phone provider, had stopped his £8-a-month phone calling plan, which meant she was billed for each call. The changes resulted in an overpayment of £482 between November 2020 and August 2022.

Donald said it was vital that people help elderly parents who may be vulnerable to review their spending. He said he also discovered that one of his mother’s old phones had a monthly charge of around £12 a month, which has now been cancelled.

“It is outrageous that companies in the current crisis are selling inappropriate products and packages to seniors. It can push older people into a position where they can’t afford to turn on their heating or buy food this winter,” Donald said.

Sir Steve Webb, the personal finance expert and former pensions minister, said: ‘Not everyone is able to watch their bank account and utility bills like a hawk, or fight through automated switchboards when things are not going well. We need a basic duty of care, especially to vulnerable clients, with tough penalties when people receive shoddy treatment.”

Shell Energy said Grant was upgraded to a £20.99 super-fast fiber plan at no extra cost in November 2020, but his calling plan was mistakenly removed. They said this resulted in an overpayment of £482.04. The company said it apologized and was refunding the money and offering free broadband and calls for the rest of the year as a goodwill gesture.

Domestic & General said it had extensive warranties to protect vulnerable customers and was satisfied that the policy sold for Grant’s washing machine was offered and sold fairly. Repair & Assure did not provide details on how it marketed its policy, but said a claim had been made about it and it did not believe it was unnecessary.