HSBC. Barclays. RBS. Just some of the big banks signing customers up to packaged accounts. Or current accounts with perks, like travel insurance and breakdown cover. All in return for a monthly fee, more than seven million bank customers now have them.
But if you're tempted, beware: most monthly fees are rising. And for some, the benefits are useless.
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Banks used to just look after your money, charging your for going into the red, or exceeding your overdraft, and plain old current accounts are still available. But they're outnumbered by heavily marketed packaged accounts, with names like 'Additions Active', 'Advance' and 'Advantage Gold'. As their popularity has increased, so has the number of complaints.
The Financial Ombudsman Service (FOS) has told us most of the complaints they received about packaged accounts come from people who didn't even know they had this kind of account, or that they signed up to it without really understanding.
What people do understand is the costs, the average annual fee has gone up from £127 in 2006 to £187 now. Research from Which has also shown nearly a third of customers don't use any of the benefits offered with these accounts, and some can be bought cheaper elsewhere anyway. But the most serious complaints are about how people were sold these accounts in the first place, the FOS has told us upheld complaints are usually because information given to the consumer just hasn't been clear enough.
Maureen and Peter Poole visited their local HSBC branch when they were enticed to sign up for a packaged account with a whole range of supposed benefits. They were told the life policies they were paying almost £60 a month for were too much, and that they could receive similar cover with the 'Advance' account for only £12.95 a month. They accepted, cancelling the policies they no longer needed. Only to discover months later that they were in fact too old to qualify for the travel insurance or the life insurance as promised. HSBC were adamant Maureen and Peter were at fault for this for not reading the full terms and conditions before signing up, leaving them uninsured in their mid 70s. To make matters worse, Maureen since developed cancer, making it impossible to find affordable life cover as they had before.
HSBC Response:
Regarding Mr & Mrs Poole
'It is clear that we made an error with this particular case. Although Mr and Mrs Poole have already used some of the benefits of the account, it appears they were incorrectly told that they could qualify for the full range of benefits, whereas in reality, they could not. As such, we have contacted our customers to not only apologise for the error, but we have also put them back in the position they were before they opened the account in question. Our customers are happy with the outcome.'
ALL the major banks say their packaged accounts offer value for money, and there are very few complaints from customers, especially about mis-selling.
They say they always advise customers of changes to prices and extras, ensure they understand all aspects of the accounts before signing up, and regularly remind them of the benefits.
You can read the full company responses here