Most businesses have specific services or products that are especially profitable. How many of these cash cows are you contributing to?
Fortunately, there has been a crackdown (of sorts) on some of the worst financial rip-offs in recent years. However, this doesn’t mean we are out of the woods yet.
All too often, people like us are milked for extra cash, paying through the nose to subsidise cheaper deals for other customers.
Here are just a few of the ways that businesses take advantage of unsuspecting customers ‒ and what you can do to battle back.
1. The rising cost of renewal
Let’s start with insurance renewals. Providers often tempt us in with a low initial offer, but then we see those monthly premiums cranked up year after year if we fail to switch.
Luckily, the Financial Conduct Authority (FCA) introduced rules in 2022 to stop so-called “price walking”, meaning home and motor insurance renewals can’t cost more than what a new customer with the same risk profile would pay.
That said, the body ran an evaluation of the industry's progress in 2025, which found that the results remain uneven.
In terms of motor insurance, these efforts have cut the average price by around £6.63 per policy, saving consumers up to £1.6 billion over 10 years.
When it comes to home insurance, however, the reduction in renewal prices hasn’t been as significant.
According to the Association of British Insurers, the average cost of a policy fell by just £2 in the second quarter of 2025.
The lesson remains the same: don’t simply auto-renew.
Even with the FCA rules, shopping around each year is still one of the best ways to cut costs.
2. Standard equals expensive
It’s a similar story when you look at energy tariffs.
Providers often entice households in with a fixed-rate offer for a year or so. But when this period comes to an end, we are moved onto the provider’s Standard Variable Tariff (SVT), which is usually much pricier.
These tariffs are subject to Ofgem’s Energy Price Cap, but that doesn’t mean they’re cheap.
From 1 October to 31 December 2025, the typical dual-fuel household on a default tariff will pay approximately £1,755 a year by Direct Debit.
That’s up slightly from £1,720 a year in the July to September 2025 cap.
While the cap protects against runaway prices, households that switch to a new fixed tariff can often undercut it.
For example, Outfox Energy currently charges 10.5% below the Price Cap and Fuse offers 9.8% less.
3. Don’t delay with remortgaging
When you take out a mortgage, you sign up for a fixed or tracker period for a couple of years. But when that period ends, you move to your lender’s Standard Variable Rate (SVR).
And these share more than a similar name to the standard tariffs employed by energy providers ‒ SVTs can be a massive rip-off as well.
While the average SVR was around 3.66% in 2020, it stands at between 6% and 7.5% in 2025, according to MoneySavingExpert.
This difference can mean hundreds more on your monthly repayments. Yes, remortgaging involves some hassle and potential fees, but in most cases, the savings dwarf the costs.
4. Stop paying for a phone you already own
Next, there’s the mobile phone market.
For years, networks have charged customers for their handsets within bundled contracts, but then kept charging the same amount even after the phone was fully paid off.
In fact, a 2025 Uswitch survey found that more than five million Brits could be overpaying £350 per year.
Luckily, networks such as O2, Virgin Media and Tesco Mobile split airtime and handset costs, so once you’ve paid off your phone, you’ll no longer be charged for it – leaving you with an airtime-only deal.
The fix is simple if your provider doesn't offer this service: make a note of when your contract ends, and be ready to switch. If you’re happy with your handset, moving to a SIM-only deal could save you hundreds of pounds over the long term.
5. Subscription creep and auto-renewals
Subscription services are another area where consumers are feeling the pinch, with millions of us forgetting to cancel free trials or paying for services we rarely use.
In 2024, Citizens Advice found that one in four people were paying for a regular subscription when they thought they’d made a one-off purchase.
The Digital Markets, Competition and Consumers Act, which came into force this year, now requires firms to send reminders before auto-renewals kick in and to make cancellation straightforward.
This should help, but the easiest way to avoid subscription creep is to do your own regular audit.
Check your bank statements or app store billing history and cancel anything you’re not actively using.
6. Overdrafts and stealth fees
Overdrafts are supposed to be a short-term buffer, but for (some) banks, they’ve become a reliable profit stream.
Most high street banks charge a flat overdraft rate of around 39.9% EAR, which is far more expensive than many credit cards.
In fact, the FCA has launched a review into “repeat use” overdraft patterns, where people end up paying hundreds in charges simply by slipping into the red each month.
To avoid becoming a cash cow:
- Treat overdrafts as an emergency facility only, not a long-term credit line
- Explore cheaper alternatives such as a low-rate credit card, or ask your bank about arranged overdraft offers
7. The buy now, pay later credit trap
The boom in buy now, pay later (BNPL) has created fresh meat for lenders.
These services let you spread payments over weeks or months, often marketed as interest-free. But the costs mount if you miss a payment.
According to FCA research, one in five (20%) UK adults (10.9 million) had used it at least once in the 12 months to May 2024, up from 17% (8.8 million) in 2022.
Although the Government has confirmed that regulations will start in 2026, many providers continue to profit from late fees and penalty charges.
Although BNPL can be a useful budgeting tool in some cases, you’ll need to use it carefully.
If you rely on this method regularly, you risk racking up charges that make retailers – and lenders – richer at your expense.
Have your say
Do any of the practices on this list particularly get to you?
Or is there anything you think we’ve missed?
We’d love to hear your thoughts below.