On Sunday 31st March 2013, new rules from the Financial Services Authority (FSA) will come into effect. Banks will have to send packaged account customers annual statements outlining whether they are still eligible to receive the insurance policies they are paying for. They will also have to check the eligibility of customers for insurance policies when they first apply for a packaged bank account.
Michael Ossei, personal finance expert at Uswitch.com, 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.”
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Uswitch is the UK’s top comparison website for home services switching. Launched in September 2000, we help consumers save money on their gas, electricity, broadband, mobile, TV, and financial services products and get more of what matters to them. Last year we saved consumers over £373 million on their energy bills alone.
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