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Customers to be ‘Assessed’ for Bank Accounts

The Financial Services Authority (FSA) has submitted a new set of rules which will see banks assess customers’ eligibility to claim insurance offered as part of paid for ‘bundled’ bank accounts.

This comes after a review by the City watchdog which was aimed at the future prevention of mis-selling bank accounts. The rules will come into force no earlier than the end of March 2013. According to the FSA one in five adults have such a bank account, which have a fee for extra’s such as insurance, discounts and breakdown cover.

Following recent mis-selling of financial products, including those such as Payment Protection Insurance (PPI) and overdraft charges, financial products have been the subject of much scrutiny, and there are concerns bundled bank accounts could become the latest problem.

The most common types of insurance included in these accounts are mobile phone cover and travel insurance. The concerns have surfaced after it was revealed that some customers have been unable to claim on their insurance due to personal circumstances, and therefore should not have been sold the bank account in the first place.

The consequences of this, under the new rulings, means banks will have to do more when selling bundled accounts to ensure that customers are eligible to receive the benefits. This will include checking whether customers are eligible to claim under the bundled account insurance policies, sending the customers eligibility statements to check whether the policies met their needs, and making sure sales advisors alert customers to policies that may not be suitable for them.

On top of this banks and building societies will have to write to customers annually in order to remind them to check whether they still qualify for the policy.

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