6 August 2012

FSA launch programme to stop banks mis-selling packaged accounts

The Financial Services Authority has published new regulations for the selling of packaged current accounts to stop banks selling products customers cannot use.

The FSA has published new rules requiring banks to check customers eligibility for the insurances sold in packaged accounts.

Packaged accounts are current accounts with other products bundled into the account with a monthly fee. The most common bundled products are travel insurance, mobile phone insurance, music downloads, commission free foreign currency, preferential overdraft terms and breakdown assistance cover.

According to the FSA, 1 in 5 bank accounts are now packaged accounts and they feel the need to increase consumer protection. At the moment there is no obligation on the bank to check that you would be eligible to claim under the insurance policies being sold. So for example a 68 year old could be sold a package including travel insurance that only applied for under 65′s.

The new rules will not be in place until 31 March 2013 so until then it's still very much a case of check for yourself.

One common "benefit” is commission free foreign currency, however this in itself is a bit of an outdated term, most foreign exchange bureaux do not charge commission any more and even if they do, it is the combination of charges and the exchange rate that makes the difference. For the best travel money rates, check out our comparison engine.