‘Don’t bank on package accounts’

Firms selling packaged bank accounts still have work to do to make sure customers are treated fairly when they take out a deal and if they later complain it was mis-sold, the City regulator has found.

In a sample of complaints about the misselling of packaged bank accounts looked at by the Financial Conduct Authority (FCA), firms achieved a fair outcome for customers in less than half of cases.

Packaged bank accounts are paid-for current accounts that come with at least one insurance policy, such as for travel or mobile phones.

Concerns that consumers were taking out unsuitable deals – for example, because they had pre-existing medical conditions, making them ineligible for a travel insurance policy – led to new rules being introduced in 2013.

Firms must find out and record whether customers are eligible to claim for the insurance in the package.

They are also required to send annual statements, prompting customers to check if a deal still meet their needs.

An FCA review has found standards have risen, but firms have more work to do.

More than 9million customers across the UK were estimated to hold a packaged bank account in 2014.

While the volume has fallen since then, a substantial number still have such a deal, the FCA said.

The review found eligibility checks for travel insurance had improved, but the FCA said firms should do more to check eligibility for other types – such as gadget insurance and breakdown cover.

“Firms are also required to send annual statements”