'Mis-selling' fears over packaged bank accounts

Claims industry is gearing up for a lucrative new round of legal battles

The "no win, no fee" industry is gearing up for a new year assault on Britain's banks over the sale of packaged bank accounts.

Lenders such as Barclays, Lloyds Banking Group and HSBC have already paid out billions of pounds in compensation to customers for mis-selling products, most notably for payment protection insurance and interest rate swaps.

Fears are now growing among senior bankers that packaged bank accounts will be the next target, with the Financial Services Authority (FSA) publishing new guidelines on Friday following a review of the market earlier this year.

The accounts, which usually include insurance cover and other benefits such as roadside assistance, are now used by more than 10 million people across the UK.

From March next year, banks and building societies will have to provide customers with annual statements setting out the qualifying criteria they need to claim benefits on packaged accounts. The statement will have to be sent separately from other documentation.

Institutions must also alert those customers who have reached the age limit for the travel insurance or who reach the limit before the next eligibility statement is due.

The FSA guidelines are unlikely to lead to historical claims. However, the claims management industry is already sharpening its knives in anticipation of a series of legal fights on new payouts.

Ryan Horne, managing director of iSmart, said: "We are delighted to see new regulations coming in which will make the banks ask customers whether they want these accounts and whether they can use the products included in them.

"We have already been able to claim back these fees on behalf of customers because they have been mis-sold – and we believe there are many people out there in the same situation."

According to recent figures from the data analyst company Defaqto, there are currently about 70 different types of packaged accounts on sale in the UK, compared with 39 in 2007.

The average charge for a packaged account is now about £15.28 a month, up from £11.80 five years ago.

Separate research from the consumer watchdog Which? has found that up to a third of customers do not use any of the benefits on offer with the accounts.

The British Bankers' Association (BBA), which has also been faced with the Libor-rigging scandal, said the industry would monitor the latest developments. The industry has been under intense pressure to salvage its reputation following a series of scandals.

"Our members have been working closely with the FSA on this issue and will be studying the paper closely to consider its implications for them," the BBA said in a statement.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?