Backlash on Rip-Off Bank Accounts

Article excerpt

BANKS are suffering a customer backlash over claims they widely missold fee-paying packaged accounts, official figures reveal today.

There have been thousands of complaints from account holders who say they have paid up to PS300 a year for perks which they never knew existed...and didn't want.

In the worst cases, consumers claim they were unwittingly signed up to these 'rip-off' deals and the fees for them automatically docked from their account.

Many were sold the accounts by pushy staff at the high street banks who were paid commissions for meeting sales targets.

Figures show how the Financial Ombudsman Service has seen complaints about packaged accounts soar by 155 per cent in the past nine months. It is now receiving dozens every day. And it is finding in favour of customers in eight out of 10 cases. The Ombudsman says most of the complaints are about the way the account was sold. Many did not even realise they were paying for a packaged account as they had been 'upgraded' without being told.

Some had been misled into believing a fee-charging account was their only option or were told they had to take it out to get the loan or mortgage they wanted.

Others were lured into forking out for insurance policies only to later discover they were ineligible to claim on the cover they were paying for.

The banks are now being forced to pay back thousands of pounds in compensation in the latest scandal to engulf the banks. They have already paid out PS13.3billion compensation on payment protection insurance.

An estimated one in five adults has a pricey packaged account, such as Lloyds Bank's Premier, which cost PS25 a month, Barclays Additions Active account at PS15 a month, and the Halifax Ultimate Reward account which costs PS12.50 a month.

Typical perks include travel insurance, breakdown cover, mobile phone insurance and even home contents insurance. …