Backlash on Rip-Off Bank Accounts

Daily Mail (London), January 28, 2014 | Go to article overview

Backlash on Rip-Off Bank Accounts


By Sam Dunn and Victoria Bischoff BANKS are suffering a customer backlash over claims they widely mis-sold feepaying 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 did not want.

In the worst cases, consumers claim they were unwittingly signed up to these 'rip-off' deals and the fees 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. The 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 ten 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 feecharging 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.

Last night Marc Gander, founder of the Consumer Action Group campaign body, said: 'Buying a packaged account has been like buying a ticket for a lucky dip.

'You're fortunate if it contains what you need - even though your bank tells you that it does. With the Ombudsman upholding 80 per cent of complaints, it shows that the banks are back to their old trick shown with payment protection payouts of making it as difficult as possible to get a just decision. Nothing has changed.'

The banks are now being forced to pay out thousands of pounds in compensation in the latest scandal to engulf them. They have already shelled out PS13.3billion in compensation for mis-sold payment protection insurance.

An estimated one in five adults has an expensive packaged account, such as Lloyds Bank's Premier, which costs PS25 a month, the Barclays Additions Active account at PS15 a month, and Halifax's Ultimate Reward account at PS12.50 a month. Typical perks include travel insurance, breakdown cover, mobile phone insurance and even home contents insurance.

Customers may also be offered low-cost loans and bigger overdrafts. But a report by the financial regulator estimated a third of these account holders fail to use the benefits for which they are paying up to PS300 a year. …

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Backlash on Rip-Off Bank Accounts
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