Banks Sell Rip Off Packaged Bank Accounts
Posted on: March 4th, 2014 | Author: crystaladmin
Millions of UK adults pay into a monthly bank account which has been sold on the basis of ‘Free Insurance’. The banks turned to these packaged accounts as a source of easy cash but they were sold to people who have no use or were not eligible for the cover. Even the Regulator FCA say a huge number of these policies are useless!
Around 1 in 5 UK adults have a pre paid packaged account, which come with a range of insurance policies such as breakdown, travel, ID theft and Mobile Insurance with a monthly fee of around £8 – £25. For some people these packaged accounts offer good value for money but for others the insurance that they are paying for is useless.
- The client wanted a loan, mortgage or overdraft and was told they had to take out a packaged account to do so.
- The client was automatically upgraded to a packaged bank account without their knowledge.
- The client wasn’t informed that there was a free option.
- The client was not eligible to make a claim on the insurance. For example travel insurance only covered people under 65.
- The client was not informed that they needed to activate some of the insurance policies. For example the client need to ring up to activate the mobile phone insurance.
- The client was told that they were getting unbeatable discounts such as home insurance but it in reality they could of gotten it cheaper elsewhere.
Many banks have begun to pull their packaged accounts from sale including Santander in spring 2012 with Lloyds pausing the sale of their packaged deals in January and the Co-operative in March.
The Financial Ombudsman receives around 60 complaints a week regarding packaged accounts. The majority of the complaints are about the way the policy was sold to them or that they were not eligible to make a claim on the insurance.
The FCA are proposing that banks and building societies check that consumers are eligible to make a claim on insurance cover before selling the packaged bank account to them. They must also provide customers with an annual eligibility statement prompting them to check if their circumstances have changed and that they are still eligible to make a claim on the policy.
If you feel that your packaged bank account has been mis-sold or that you have been treated unfairly, simply submit an online enquiry form or call us on 01270 44 66 44 to speak to a member of the Crystal Legal team who can advise if you’re entitled to make a claim.