Millions of bank customers could be
entitled to thousands of pounds each in compensation for allegedly being
mis-sold fee-charging current accounts.
Around
a third of customers with a packaged account, which cost up to £300 a
year, fails to use benefits such as travel insurance, mobile phone cover
and breakdown policies that come as part of the deal.
A
fifth of current account holders have these packaged or perk accounts.
Many were lured into opening them by branch staff who receive large
commissions for meeting monthly targets that tie customers to a
lucrative monthly banking fee.
Millions of bank customers could be entitled to
thousands of pounds each in compensation for allegedly being mis-sold
fee-charging current accounts.
The deals are often sold as upgrades to basic free accounts. Frequently, though, the perks are useless.
Pensioners
discover they are excluded from the travel cover and drivers find they
have simply duplicated insurance they already have.
Charities have complained that cancer
sufferers have been unable to claim on insurance sold with the accounts
because key exclusions that rule out people with health problems have
not been explained.
The news follows the scandal
surrounding the mis-selling of 16million policies for payment protection
insurance (PPI) since 2005 to cover monthly repayments on credit cards
or loans should the customer loses their job.
Banks
sold the policies to people who did not need them, did not want them
or, in many cases, did not know they were even buying them.
Justin
Modray, of the Candid Money website, said the selling of packaged
accounts also left much to be desired. He added: ‘Banks have been
misleading about their marketing for these accounts and sometimes the
way they were sold could be quite dubious.’
The
Financial Ombudsman Service is receiving an increasing number of
complaints concerning packaged accounts, particularly from those sold
insurance for which they are ineligible.
A
spokesman said: ‘If a consumer was unaware, did not require, or did not
want a packaged account and believed that they had been mis-sold, the
consumer could be entitled to all their premiums being refunded.’
Last
February, the Mail reported how the Financial Services Authority had
begun an investigation into the sale of packaged accounts.
It
will now introduce rules forcing banks to check whether a customer can
claim under insurance policies. They will also have to write to
customers each year outlining their cover.
Claims
firms have begun promising to win compensation of thousands of pounds
for the accounts, although they charge up to 25 per cent of a claim.
Northampton
firm iSmart says it has won compensation of £900 to £1,500 from high
street banks for customers who were mis-sold the accounts.
Managing director Paul Fakley said: ‘We believe this is the next big compensation scandal after PPI.’
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