THE FINANCIAL Services Authority has said it wants to clamp down on the way banks and building societies sell insurance on packaged accounts which can turn out to be “useless”.
The regulator wants to prevent another mis-selling scandal by forcing lenders to check whether a customer is eligible to claim under each policy and then to tell them.
About one in five UK adults has a packaged account, a form of current account which can cost up to £300 a year and comes with other products such as ticket discounts or protection from identity theft.
Sheila Nicoll, FSA director of policy, said: “We are concerned that it may be too easy at the moment for firms to sell customers something they do not understand or need”
The regulator has published a consultation paper which also suggests banks and building societies provide customers with an annual eligibility statement to see if their circumstances have changed and tell them if a packaged account is unsuitable.
A spokesman for the British Bankers’ Association said packaged accounts could be a “good deal” but added: “Customers should shop around for the deal which suits their own needs best.”