Packaged Bank Accounts: A Marketing Triumph
Knight, Julian, The Independent on Sunday (London, England)
Santander was the first big-name bank last year to say it is pulling out of the packaged current account market. This week this move was finalised. These accounts charge a monthly fee in return for alleged souped-up customer service and lots of insurance policies, such as travel or mobile phone cover.
I have always thought them to be a triumph of marketing, with much of the insurance policies very basic and potentially replicating cover you have elsewhere, for example through a standard home insurance policy.
Packaged accounts have attracted the ire of both regulators and consumer groups, but hundreds of thousands have been persuaded to pay for current account services which they used to get for free.
However, there is more than a hint of mis-selling about many of these packaged accounts - particularly the first-generation ones - and there have been rumours of the no-win, no-fee law firms looking at them as a potential means of attack against the banks, much as we have seen played out with payment protection insurance. The only thing that has probably gone against legal action in the past is the fact that the monthly fees are generally quite low, so the no-win, no-fee firms may find it difficult to make legal action pay for them.
Santander's exit from this market has to be seen against this backdrop, and ultimately they may not be the only bank to take flight.
But longer-term, what …
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Publication information: Article title: Packaged Bank Accounts: A Marketing Triumph. Contributors: Knight, Julian - Author. Newspaper title: The Independent on Sunday (London, England). Publication date: July 21, 2013. Page number: 78. © 2009 The Independent on Sunday. Provided by ProQuest LLC. All Rights Reserved.
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