The Financial Services Authority (FSA) has published a consultation paper into packaged current accounts, with Which? finding they’re rarely worth the money.
The industry watchdog today called for increased customer protection when it comes to packaged accounts. It wants banks and building societies selling insurance as part of a packaged account to check the customer is eligible to claim under each policy before they take out the account.
The FSA has proposed that customers are given an annual eligibility statement prompting them to check whether their circumstances have changed and whether the policies continue to meet their needs.
It also wants sales advisers recommending packaged accounts to make sure the policies are suitable for the customers in question, alerting them if some are not.
Are packaged accounts worth it?
Which? research into packaged accounts earlier this year found that while almost 20% of Which? members have a packaged account as their main current account, 30% of them don’t use any of the benefits offered. This amounts to somewhere between £240m and £320m in bank fees each year.
We also analysed 18 of biggest packaged accounts on the market, all costing between £60 and £300 a year, finding Santander’s Premium Current account to offer the most value.
Account benefits most used by Which? members included travel insurance, commission-free travel money and car breakdown cover.
More help needed on packaged accounts
Which? is concerned that almost one in three people have been paying for benefits they don’t use.
Which? executive director, Richard Lloyd, said: ‘We’re pleased that the FSA has investigated this and is proposing further action. People should only have a packaged account if they’re absolutely certain that it will be cheaper for them and they’ll use all of the separate benefits offered.
‘Banks have a responsibility to make packaged accounts more transparent by clearly explaining what each of the individual elements are worth, so customers can compare.’
- Finding the right bank account – more on whether you should pay for your bank account
- Best and worst packaged accounts – which accounts are most and least valuable
- Which? Best Rate current accounts – read our expert current account reviews