Consumers are losing the equivalent of a week’s wages each year thanks to poor services, faulty products and delayed deliveries.
A report by Citizens Advice has found that consumer problems cost people £23bn a year – an average of £446 per person.
Problems with broadband, TV and phone companies are the most common and cost consumers a whopping £4.2bn a year.
Issues with professional services such as lawyers and accountants cost £4.1bn, construction problems cost £3.5bn and £2.6m was wasted on property services like letting agents.
The report, which is based on interviews with more than 1,600 people, found that people spend an average of 22.5 hours each year – including six hours of work time – trying to sort out these problems.
It also found that only 45% of people push for compensation, with many finding the process too complicated or simply assuming they won’t be successful.
Citizens Advice said attempts by the government to improve household finances – such as increasing the income tax threshold and raising wages – are being undermined by companies letting down and ripping off consumers.
Gillian Guy, the charity’s chief executive, said: “People are paying through the nose for the mistakes and failures of businesses.
“Consumer markets are a vital pillar of the UK economy, but at the moment there are some companies who are ripping off consumers and undercutting businesses that do the right thing.
“As well as hammering household finances, failing consumer markets hit essential parts of people’s lives that they rely on – like energy supply, transport, banking and insurance.”
According to the report, more than £10bn is wasted each year on poor quality service, £3.2bn on companies failing to provide an item or service, £2.6bn on problems with prices charged and £1.3bn on poor quality goods.
It reveals that broadband, TV and phone services give us by far the most problems at 27.6m a year. Train services cause 9.6m problems, energy 8.9m, electrical appliances 6.4m, bus services 6.1m, eating out 5.1m and construction 4.8m.
Citizens Advice said the worry is that these figures are just the tip of the iceberg as people are also losing out to scams that go undetected and by not regularly switching their energy and broadband providers.