New rules after packaged current accounts mis-selling fears

NEW rules come into force tomorrow aimed at preventing consumers from being mis-sold unsuitable packaged current accounts.

Providers of the accounts, which feature an average monthly fee in exchange for benefits including travel and car insurance and preferential savings rates, will now be forced to tell customers exactly what they are paying for.

Banks and building societies will also have to remind customers to review their benefits to ensure they are suitable for them, among other measures taking effect.

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The rules are being imposed amid concerns over mis-selling of the accounts, with evidence suggesting that few people use the benefits they are paying for.

Many are ineligible for the insurance included in their package, while packaged account customers often have the same cover separately, meaning they are paying twice for the same insurance.

The new rules have prompted some providers to withdraw their packaged accounts from the market due to concerns over possible mis-selling claims.

The changes are being imposed by the Financial Services Authority in what is effectively its last act before beings replaced on Monday by the Financial Conduct Authority.