MSE News: FSA: Why we need a packaged account crackdown

edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
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MSE_GuyMSE_Guy MSE Staff
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edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
This is the discussion thread for the following MSE News Story:

"The FSA wants tougher rules on the sale of fee-paying current accounts. Its director Sheila Nicoll explains why ..."
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  • edited 28 October 2011 at 4:08PM
    ConsumeristConsumerist Forumite
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    edited 28 October 2011 at 4:08PM
    Is this another mis-selling scandal waiting in the wings?

    When the banks run out of ideas to sell rubbish to their customers, perhaps we will finally get back to a situation where we ALL pay for the banking services we use and put an end to the "free banking" lie.
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
  • ses6jwgses6jwg Forumite
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    Fee-paying bank accounts will become the next PPI, mark my words.
  • corbyboycorbyboy Forumite
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    While some of the advice such as activating services is useful, I can't help but think much of this is common sense.

    If somebody tries to sell you an account offering travel insurance, breakdown cover and mobile phone insurance and you already have these then even the world's best salesman shouldn't be able to sell you this account.

    If somebody asked me if I wanted to buy a car my reply would be "sorry, I already have one." Surely the same applies here.

    Unless, of course, sales staff are putting pressure on customers or telling them lies. Then I agree that this is a scandal just like PPI.
  • wouldbeqaulitymoneysaverwouldbeqaulitymoneysaver Forumite
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    Lloyds TSB is trying to sell me a variety of packages ranging from £7-19 per month.
    I heard somewhere that Insurance is sold in packages and there is much carelessness over these Insurance bundles and the City isn't exactly infused with an Customer-First Service Ethos. Personally I am skeptical as it seems with Financal Services Joe Public is being screwed here there and everywhere.
    I don't trust the FSA either.
    They had all the expertise to prevent the crises and did sweet !!!! all to help.
    #TY[/B] Would be Qaulity MSE Challenge Queen.
    Reading whatever books I want to the rescue!:money::beer[/B
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  • opinions4uopinions4u
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    Lloyds TSB is trying to sell me a variety of packages ranging from £7-19 per month.
    So is it good value for YOU or not? That's the decision you have to make.
    I heard somewhere that Insurance is sold in packages and there is much carelessness over these Insurance bundles and the City isn't exactly infused with an Customer-First Service Ethos. Personally I am skeptical as it seems with Financal Services Joe Public is being screwed here there and everywhere.
    I don't trust the FSA either.
    They had all the expertise to prevent the crises and did sweet !!!! all to help.
    I refer you to the queston above.

    Think it through:

    1) Would you normally buy the insurances in any of the packages?

    2) How much would you pay for those insurances?

    3) How much are they bought together via the bank?

    4) Are there any major exclusions in the bank's policy compared to the one you would have bought?

    5) Is there any benefit to the other insurances in the package that you wouldn't have bought?

    6) Is there a convenience to buying them all together?

    The answers to these questions should make it easy enough to make a decision to buy from the bank of otherwise.

    For Mrs o4u she would pay £70 for breakdown cover with homestart, £70 for annual travel cover for the clan and £50 for a slightly superior home emergency cover on our contents over. £190 in total. She pays £120 to the bank for the same.

    So she now also uses phone cover and card protection cover too, although she'd never have previously bothered.

    There's value to be had.
  • damo24damo24 Forumite
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    I know this will come as a shock to most people but I really think that my package with Barclays is not only a good package, it is also good value for money. Let me explain.

    I have a "Current Account Plus" with them which costs me £6.50 per month. For that payment I get the following extras:
    • Mobile phone insurance - this covers me if my phone is lost, stolen or damaged and cover for up to £2,000 worth of unauthorised calls. I can make up to 2 claims in a 12 month period and the excess on the policy is £25 (£75 for iPhones). Not bad considering it would cost about £450 to replace my current Android smart phone.
    • Card holder protection - this covers cards with ANY bank not just Barclays, up to £300 cash lost or stolen with the cards, my passport and driving licence and it gives me tags to attach to my luggage and keys should they ever get lost. With one phone call I can cancel my cards and travel documents, get cover for unauthorised use and get emergency cash to help me get by until I get sorted.
    • Gadget insurance up to £500 - this covers any gadgets up to a combined value of £500 against theft or accidental damage and electrical and mechanical breakdown until they are 5 years old. This happily covers my iPod, laptop and digital camera and has a limit of 2 claims in a 12 month period with a £25 excess for the first claim and a £50 excess for the second one. As a computer technician I know that most laptops will start to suffer mechanical failures by about the third year, so this seems like amazing cover to me.
    • 1 year extended warranty in addition to the manufacturer's guarantee for domestic appliances. This covers parts, labour, callout, accidental damage and food loss. Appliances are replaced on a new-for-old basis.
    • Identity support helpline - I know that this is not worth the paper it's written on but at the same time, I'm listing all of the features of the account.
    • Near limit text alerts - I can set a limit and get free texts when my account falls below that limit. There is a £2 charge for this service on non-premium accounts whether you get a text or not.
    • Legal and tax helpline - free telephone advice which is pretty good on the odd time I've had to use it although it will not give advice on claims against Barclays (for obvious reasons).


    At least twice each year, I get a letter from Barclays reminding me of all of these services and pointing out which ones I need to register for and which ones are automatically provided without question.

    Because I use Barclays' online banking, I am also given free internet security software. The current offer is for Kaspersky Internet Security 2012 which I can vouch for is a good package. The offer covers 3 Windows computers, 1 Mac computer and 1 smartphone (Windows, Android, Blackberry or iPhone). IF you have 3 Windows computers a Mac and an Android phone, this would cost you about £53 (based on current prices on Amazon and the Android market place). I should point out that the internet security software is free to anyone who uses Barclays internet banking. Personally, I have 2 computers, a laptop and an Android phone so I think I get pretty god value for that.

    I personally cannot see how I could get all of these features for less than £6.50 each month and I have not been able to find another bank that offers anything like this level of extras for the price. You can find full details of Barclays' Current Account Plus at http://barclays.co.uk/Currentaccounts/Bankaccounts/CurrentAccountPlus/P1242557963790 and before someone asks I can assure you that I DO NOT work for Barclays or have any personal relationship with anyone who does.
  • ses6jwgses6jwg Forumite
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    damo24, I don't think anybody is saying that all fee-paying bank accounts are a scam.

    On the contrary, if you make use or feel you need the for the benefits, they can be excellent value.

    I pay £6 a month of full RAC cover, family worldwide travel, id protection, card protection, key protection, access to credit report.

    Unfortuantely, the issue is that these accounts, have in the past, and continue to be, sold to people who have absolutely no need for the benefits value, are not eligible, or don't even know they have them.
  • damo24damo24 Forumite
    299 Posts
    Hi ses6jwg,

    My apologies, I think I mis-understood the point of the thread. I think you're right, there will be a LOT of people out there who have been sold premium accounts they don't actually need or want.

    Just out of interest, if you don't mind me asking, which bank do you get your package with? I think it's certainly worth me having a look at it for a comparison.
  • ses6jwgses6jwg Forumite
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    damo24 wrote: »
    Hi ses6jwg,

    My apologies, I think I mis-understood the point of the thread. I think you're right, there will be a LOT of people out there who have been sold premium accounts they don't actually need or want.

    Just out of interest, if you don't mind me asking, which bank do you get your package with? I think it's certainly worth me having a look at it for a comparison.

    I have a Reward Bank account with Santander, normally £10pcm but as I am staff I get it for £6.

    Personally, I think one of the best value packaged accounts out there is the Halifax Ultimate Reward if you can pay in £1000 pcm.
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