FSA looks to tighten packaged bank account rules

The Financial Conduct Authority (FSA) is proposing new regulations in regards to packaged bank accounts.

Travel Insurance News - 07/11/2011

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FSA officials say the agency is looking to tighten controls on accounts that often include add-on services such as mobile phone insurance, breakdown cover and travel insurance for a single monthly fee in order to better protect consumers. The services, which range from £6.50 upwards to about £40 per month, are not regulated enough to ensure that customers are adequately protected, the FSA says.

The news comes as the number of packaged account services available to UK consumers has doubled in just five years, according to new data from the Defaqto data analysis agency.

Now the FSA has proposed new regulations that require building agencies, banks and other firms offered packaged services to ensure that customers are adequately covered by the services offered. Currently up to a third of customers opting for packaged add-ons do not make any claims.

FSA policy director Sheila Nicoll said that while packaged accounts often prove valuable and convenient, some turn out to be useless for policy holders. She said the agency is concerned that it might be currently too easy for providers to easily sell useless or unneeded services to customers.

David Morey of PricewaterhouseCoopers said he supported such regulations, adding that they would lead to better defined and simplified packaged accounts in the UK.

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