There’s a gloom in the air when it comes to spending in the UK. Next year’s forecast for economic growth has dropped to 1%, down from 1.4% as consumers cut back their spending across the board. Even Black Friday, which usually provides a boost to the high street, passed without much notice as visits to shopping destinations cratered by 7.2%. When even one of the most manufactured shopping holidays can’t coax people out to spend, you know something is seriously wrong.
It’s not surprising. A key part of why consumers are paying through the nose is an uncompetitive consumer market. One look at the numbers, reveals that inflation is being driven by higher service costs as companies gouge their customers for all they’re worth. Whether it is insurance, cars or phones, customers are paying more and getting less.
However, the tide may be about to turn. The 2015 Consumer Rights Act paved the way for US-style class actions to be brought in the UK. Now, in 2025, they are finally picking up steam. Already, 65 per cent of the public said they would sign up to a class action if given the chance. Across the UK the value of class actions keeps rising, reaching £135bn in 2024 and is set to clear a whopping £155bn in 2025, marking an eighth year of growth. It’s a clear signal that consumers are willing to hold companies to account.
Even the courts are joining the fray. Take the recent car finance scandal, where millions of consumers were deliberately misled by car financiers, who allowed dealers to take a commission for every car sold without telling consumers. Rightfully, the courts decided that a collective approach was necessary for compensation. As a result millions will be eligible, on average, for £700 in compensation.
It’s not just cars; the UK telecoms industry is rife with consumer rip-offs, particularly through what’s known as the “loyalty penalty”, where long-term customers continue to pay the same monthly fees for handset and airtime bundles, even after the handset is fully paid off, effectively overcharging millions of loyal customers. In 2018, Citizens Advice filed a super-complaint with the Competition and Markets Authority, revealing that customers across mobile, broadband, insurance, and savings markets were routinely overcharged, costing consumers an estimated £4 billion a year.
Now Justin Gutmann, who successfully pushed Apple to compensate consumers after slowing their phones, has successfully brought the fight to O2, Vodaphone, EE and Three. With the case certified by the Competition Appeal Tribunal, it will now proceed to trial. This represents a potential payout of £1.141 billion for consumers, making it one of the largest class actions ever launched in the UK. More than 10.9 million contracts fall within the claim period, covering agreements from 1 October 2015 to 31 March 2025, and eligible customers could receive up to £104 per contract if the case succeeds.
For too long consumers have been getting a bad deal from companies which hold more information than their consumers leaving customers to guess and trust corporations that they are getting the best deal. Thankfully, class actions are here to level the playing field and put money back in the pocket of consumers where it firmly belongs.
