Banks offering packaged accounts must improve their sales and complaints handling, the UK’s financial watchdog has warned.
The Financial Conduct Authority has conducted a thematic review into packaged accounts, which bolt on products such as insurance to a current account, after imposing new rules on the sector in 2013, writes Emma Dunkley.
The watchdog found that standards in the packaged account market have improved, in areas such as checking whether a customer is eligible for travel insurance.
However, the FCA said banks and firms “had more work to do” to check the appropriateness of including other types of insurance for customers, such as motor breakdown cover.
Complaints against packaged accounts shot up in late 2014 as sales volumes increased. The FCA said in its review that too many customers who complained about being mis-sold packaged bank accounts during this period did not get the right outcome.
Jonathan Davidson, executive director of supervision for retail and authorisations at the FCA, said:
We continue to believe that there is a place in the market for packaged bank accounts, as they can provide good value and convenience for consumers.
But we expect these products to be sold fairly and for customers to have the information they need to make an informed choice. And customers should not have to complain to the Ombudsman to get a fair outcome if things go wrong.