Is it really not yet standard practice for bank staff to explain how a product will benefit the customer before selling it to them? The Financial Services Authority’s (FSA) plan to crack down on the way banks sell packaged current accounts which are all well and good but will the banks learn their lesson?

Packaged current accounts provide customers with a handful of benefits, such as mobile phone insurance, travel insurance and breakdown cover, in return for a monthly fee – usually between £5 and £25. The FSA has proposed a set of new rules laying out how this type of account should be sold – to ensure people aren’t paying out again for services they don’t need.

These ‘new rules’, however, boil down to making sure the customer understands what they are paying for. Take the first new rule for example – banks should check the customer is eligible to claim under the policies sold as part of the account. In instances where the product clearly won’t benefit the customer – i.e. they don’t have a car so don’t need breakdown insurance – are staff not required to flag this up?

This is basic customer care and what has struck many people is how frighteningly similar parts of it are to issues raised by the recent Payment Protection Insurance (PPI) mis-selling scandal. In fact could packaged current accounts end up being PPI: the sequel?

While on the face of it completely different products; like PPI, people tend not to buy packaged current accounts but are rather sold them. As the FSA said: ‘Consumers do not tend to proactively search for this type of account but are more likely to be upgraded by their existing bank or offered a packaged bank account rather than a fee-free account when opening a new current account’.

This type of sales tactic can be dangerous for consumers – especially those who have a tendency to be swayed by sales talk. Couple this with staff who are under pressure to hit demanding targets and encouraged by incentives to sell more of one type of product than another, and you’ve got yourself a potential mis-selling scandal in the making.

While it’s good news the FSA is monitoring these practices – what about those who have already been sold an account? Anecdotal evidence in the press certainly indicates that there are many examples of people who have been sold a packaged current account that is completely inappropriate for their circumstances. The question however is, how many complaints will it take before the FSA looks closer at how widespread these cases of mis-selling are?

Sally Bowyer, Managing Director of financial claims specialist BrunelFranklin.com says that the public are slowly becoming wiser to the tactics of mis-selling, but that a lot of the damage is already done: “It is important to realise that we may all unwittingly have taken out PPI during the years when lenders were offering a seemingly endless line of credit in the form of loans and credit cards in particular. It costs nothing to check your paperwork for insurances that you may not even know you are paying for. PPI per se is not a bad product; however the onus is on the vendor to ensure the product is the best for your needs at the time of sale. If the best product for your needs was not offered, or if you were unaware of the true cost, for example, you may have grounds for a refund.”

Learn more about PPI refunds and find out if you could apply for a refund today! Visit the website www.brunelfranklin.com or call Brunel Franklin, free, on 0800 051 54 51.