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New rules for current account benefits

New rules for current account benefits

Category: Banking

Updated: 20/07/2017
First Published: 27/07/2012

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 It is now over 6 months old so the content may be out of date.

The Financial Services Authority (FSA) has outlined a new set of rules regarding the potential mis-selling of current accounts with benefits, or packaged accounts as they are known.

Many providers sell packaged accounts to customers with the allure of benefits such as insurance cover.

It has recently emerged, however, that some customers have been sold accounts with free cover, but have not been eligible to claim on the insurance.

Under the new rules, due to take effect in March new year, banks and building societies must make thorough checks with the customer to establish whether the cover offered as part of the account will suit their lifestyle and needs, to avoid being declined in the event of a claim.

Sheila Nicoll, director of policy at the FSA, said: "These products are often referred to as upgraded accounts but if you end up paying for an element you can't claim on, it's money down the drain.

"We are closely monitoring the promotion of packaged bank accounts and the new rules will make sure customers know what they're buying and that they can rely on the product or have the limitations explained before buying."

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