FOS complaints up as banks package useless insurance with accounts
by Luke Whitmore, 23rd May 2011
Despite the banks' conclusive legal defeat in the PPI
mis-selling scandal, recent figures from the Financial Ombudsman
Service (FOS) suggested that a new mis-sold insurance debacle could
be on the way.
The FOS recently released statistics concerning the cases they
have dealt with over the past year, which revealed that complaints
over specialist insurance products rose 66% in that time period.
Specialist insurance policies are often included as a benefit in
packaged bank accounts, which customers have to pay for, and they
involve specific coverage of things like mobile phones or travel
abroad.
However, similar to the PPI scandal, consumers are finding that
the coverage is often overly restrictive and that in many cases
they cannot make a claim on it. A large number of the complaints
say that exclusions to the policy were not made clear, in some
cases rendering the policy useless to certain customers, and others
have said that they ended up paying far higher premiums for the
insurance than would have been charged elsewhere.
Concerns have arisen that the banks are still selling these
policies regardless of whether or not they are a good deal or
appropriate for the needs of any specific customer, similar to one
of the major issues regarding the sale of Payment Protection
Insurance.
Ironically, the banks are set to increase sales of these
packaged accounts as a result of the PPI court case. With over £5
billion in compensation set to be paid out, major banks are looking
for some means to recoup their losses and many have suggested that
a drastic reduction in the number of free bank accounts available
may be the industry's solution. While it may now seem like the most
profitable path to tread, the banks will have to be cautious about
bundling in pointless insurance policies, or they could find
themselves facing another mis-selling scandal a few years down the
line.
If you were mis-sold PPI, we could help you claim a PPI refund today.
Claims
Financial
Testimonial
"I just had to put pen to paper and write to say I'm more than delighted with my settlement that you won me back from my PPI I had with Lloyds TSB. The Claim Forms were simple to fill in. It was a breeze"
Mr R Evans 11 Nov 2010