This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.guardian.co.uk/money/2012/jul/27/current-account-banks-building-societies
The article has changed 7 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Banks must check eligibility when selling 'packaged' accounts | Banks must check eligibility when selling 'packaged' accounts |
| (9 months later) | |
| Banks and building societies will have to check whether customers are eligible for the insurance that they sell as part of packaged current accounts under new rules from the financial watchdog. | Banks and building societies will have to check whether customers are eligible for the insurance that they sell as part of packaged current accounts under new rules from the financial watchdog. |
| In a bid to avoid another mis-selling scandal akin to that of PPI, the Financial Services Authority said that from March 2013 account providers will have to check whether customers are eligible to claim under each policy. They will also need to provide customers with an annual eligibility statement that will make it clear how to claim on each insurance policy in the package. | In a bid to avoid another mis-selling scandal akin to that of PPI, the Financial Services Authority said that from March 2013 account providers will have to check whether customers are eligible to claim under each policy. They will also need to provide customers with an annual eligibility statement that will make it clear how to claim on each insurance policy in the package. |
| Packaged accounts are current accounts bundled up with a range of insurance policies and other features such as overdraft facilities or even music downloads. The fee charged each month ranges from £8 to £25, depending on the account. | Packaged accounts are current accounts bundled up with a range of insurance policies and other features such as overdraft facilities or even music downloads. The fee charged each month ranges from £8 to £25, depending on the account. |
| One in five of the UK adult population now has one of these accounts. Banks are increasingly encouraging people to take them out rather than opt for the more common fee-free current account. | One in five of the UK adult population now has one of these accounts. Banks are increasingly encouraging people to take them out rather than opt for the more common fee-free current account. |
| "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," said Sheila Nicoll, FSA director of policy. | "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," said Sheila Nicoll, FSA director of policy. |
| "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." | "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." |
| Lloyds TSB has more packaged accounts than any other bank. Its £9.95 a month Silver account comes with mobile phone insurance, European travel insurance, AA breakdown cover and card protection. For £25 a month its customers get a £500 a month fee-free overdraft, worldwide travel insurance, international mobile phone insurance, comprehensive AA breakdown cover, and home emergency cover. | Lloyds TSB has more packaged accounts than any other bank. Its £9.95 a month Silver account comes with mobile phone insurance, European travel insurance, AA breakdown cover and card protection. For £25 a month its customers get a £500 a month fee-free overdraft, worldwide travel insurance, international mobile phone insurance, comprehensive AA breakdown cover, and home emergency cover. |
| Marks & Spencer recently launched its first bank current account, a packaged deal charging £20 a month for a current account that comes with worldwide travel insurance. | Marks & Spencer recently launched its first bank current account, a packaged deal charging £20 a month for a current account that comes with worldwide travel insurance. |
| "When these products first appeared around 15 years ago, some front line bank staff had sales targets which included 'upselling' these fee paying accounts," said Andrew Hagger of price comparison website Moneynet. | "When these products first appeared around 15 years ago, some front line bank staff had sales targets which included 'upselling' these fee paying accounts," said Andrew Hagger of price comparison website Moneynet. |
| "This pressure resulted in some customers getting their accounts upgraded without really understanding what they were paying for and understandably this is something the FSA is keen to stamp out." | "This pressure resulted in some customers getting their accounts upgraded without really understanding what they were paying for and understandably this is something the FSA is keen to stamp out." |
| Recent figures from the Financial Ombudsman Service (FOS), which deals with customer complaints about the financial services industry, showed that current accounts were the third most complained-about financial product the ombudsman received in 2011. | Recent figures from the Financial Ombudsman Service (FOS), which deals with customer complaints about the financial services industry, showed that current accounts were the third most complained-about financial product the ombudsman received in 2011. |
| A spokesman said packaged accounts were a new area for concern. "In some cases we see, the consumer says that they did not realise their old account had been upgraded to a packaged account and that they had not given their consent to this change," he said. | A spokesman said packaged accounts were a new area for concern. "In some cases we see, the consumer says that they did not realise their old account had been upgraded to a packaged account and that they had not given their consent to this change," he said. |
| The FSA began a consultation into changes to packaged accounts in October 2011. It is continuing to consult on further issues, including whether banks and building societies should proactively tell customers who have triggered the age limit for claiming on the travel insurance element of the accounts. | The FSA began a consultation into changes to packaged accounts in October 2011. It is continuing to consult on further issues, including whether banks and building societies should proactively tell customers who have triggered the age limit for claiming on the travel insurance element of the accounts. |
| A spokeswoman for the FSA said that banks and building societies had been given eight months to begin insurance eligibility checks on customers because "it takes time to train staff". | A spokeswoman for the FSA said that banks and building societies had been given eight months to begin insurance eligibility checks on customers because "it takes time to train staff". |
| Banks and building societies face further scrutiny of their current accounts as part of an investigation by the Office of Fair Trading, which recently announced it is looking at poor customer service, high charges and problems switching current accounts. | Banks and building societies face further scrutiny of their current accounts as part of an investigation by the Office of Fair Trading, which recently announced it is looking at poor customer service, high charges and problems switching current accounts. |
| Top savings accounts | |
| Coventry BS | |
| Skipton BS | |
| Manchester BS | |
| Powered by MoneySupermarket for the Guardian |