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Banks urged to “clear up” their account packages

Banks urged to “clear up” their account packages

Category: Banking

Updated: 14/10/2013
First Published: 14/10/2013

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Paid-for bank accounts, which offer a package of insurance deals and similar incentives and can cost up to £300 per year, are coming under the spotlight as consumer groups urge banks to clear up their policies.

The Financial Conduct Authority (FCA) has expressed concern that a lot of these accounts come with so many exclusions, catches and limitations that millions of customers are paying for services they can't actually use, with it being almost impossible for many of them to make a claim.

The FCA has revealed that it now gets 70 complaints a week in response to packaged accounts, up from 40 in 2012, with a lot involving cases where customers would never actually be able to make a successful claim under their insurance products.

As such, they've called on banks to "ensure [packaged accounts] are suitable for each customer and properly explained" and have ordered them to check once a year whether the account is still suitable for the customer's needs.

Thankfully, a lot of banks have responded. Time limitations for making an insurance claim, for example, are being extended in a lot of accounts, while terms and conditions are being cleaned up to make them simpler, fairer and more beneficial to the consumer.

This comes as more and more people are pursuing compensation as a result of mis-sold packaged accounts, and a lot of them are successful.

Figures released by the Financial Ombudsman Service show that two in three customers who complain about the mis-selling of paid-for accounts successfully receive compensation, which can add up to hundreds and even thousands of pounds per claimant.

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