28th March 2013
The banks face new rules governing how they operate packaged bank account from this Sunday. Banks will be required to send customers annual statements outlining whether they are still eligible for the associated insurance policies. The new rules arguably mark the last act of the Financial Services Authority as the organization is officially split into the Financial Conduct Authority and the Prudential Regulatory Authority.
They will also have to check the eligibility of customers for insurance policies when they first apply for a packaged bank account. Comparison site U-switch believes that increasingly packaged bank account holders will choose the services they want as the accounts become more “pick and mix”.
Comparison site uSwitch.com Michael Ossei, says: “This is a great parting shot from the FSA. For too long customers have been paying over the odds for bank accounts that offer benefits that they may not even qualify for. The new rules will bring some much-needed clarity to the packaged account market and may even force a shake-up within the industry.
“Banks will now have to go through a proper process to ensure customers meet the strict criteria for an insurance policy before they can sign up. The lengthy procedure may push some banks into deciding against offering these policies in the future – it may no longer be worth their while.
“We also expect the onus to shift towards the consumer choosing the features they want to accompany their bank account, rather than having the banks decide for them. We are already seeing banks such as Barclays offer a selection of ‘packs’ for customers to choose from to enhance their account, such as a Travel pack that includes breakdown cover and travel insurance and a Tech pack that insures gadgets. We may see more of this ‘pick and mix’ approach following the new ruling and that has to be good news for customers.”