In an echo of the PPI scandal, many bank customers have complained their accounts had been 'upgraded' to fee-paying packaged accounts without their knowledge. It is only when they start paying monthly fees for perks they did not want or even knew existed that they realised they could be out of pocket by up to £300 a year. The most expensive account is from Lloyds Premier, who charged £25 a month.
A typical packaged account can include travel insurance, breakdown cover and mobile phone insurance. Some also offer free music downloads or free days out. However, when it comes to reading the small print, not all may be as it initially appears. As an example, pensioners may find they are unable to claim on their travel insurance policy because there is an age limit of 65 years.
The City watchdog first raised fears that packaged accounts were being mis-sold two years ago and in the last year complaints have more than tripled. Around nine million people have a packaged account and if the ombudsman has received over 5,700 complaints in the past twelve months this suggests tens of thousands of people have been mis-sold.
Tougher rules were introduced forcing banks to make stricter checks that customers can claim on the insurance they are paying for and they must also ensure that any packaged account that is bought is right for the customers individual needs but this seems to have been overlooked in the rush to make additional profits on sales.
We have learnt that the high street giants are routinely rejecting legitimate complaints and give the distinct impression that they can carry on mis-selling until they are fined. This contempt for their customers is forcing more and more complainants to take their case to the Financial Ombudsman and in turn that makes us wonder just how big this scandal will become.