Tighter control over bank bundles
Posted: 23rd November 2011
Many people regret the day that banks started to push insurance policies as well as provide banking services. This recently led to the payment protection insurance scandal, which is now costing the banks millions of pounds.
In order to prevent a future recurrence of such problems, the Financial Services Authority (FSA) is proposing new and tighter rules for the sale of ‘packaged’ bank accounts under which insurance services are bundled in with banking services.
- the requirement to check to ensure that the customer can make use of the insurance provided in the bundle;
- the requirement to provide the customer with an annual ‘eligibility statement’ including a recommendation that customers review their circumstances to ensure the insurance is still appropriate; and
- a requirement that steps be taken when the insurance is sold to ensure that it is suitable for the customer.
The proposed new rules are currently the subject of a consultation exercise that ends in January 2012. The new regulations are expected to be introduced next summer.
If you are concerned that the demands made on you by your bank are unreasonable, or your bank has reneged on an agreement with you, we may be able to help.