Widespread rip-off?

So-called packaged accounts for which users pay a fee are under investigation by the Financial Service Authority (FSA) over suspicions of them being a wholesale, widespread, total rip off.

Around 7.5m Britons have a packaged account — that’s around one in seven of the population – and consumer groups have long railed against the accounts’ questionable benefits, saying that customers are paying too much.

Consumers are charged between £60 and £300 a year for a range of perks that come with the account, including travel ¬insurance, car breakdown cover, mobile phone insurance and an interest-free overdraft.

The FSA aims to probe the quality of the advice staff have given customers about the perks on offer and the quality of the products offered. In some cases, the accounts have been sold to customers even though they have similar insurance in the same bank.

A spokesperson for the FSA said: 'We have stated before that ¬packaged accounts can have real ¬benefits for some customers, but they do not suit everyone.

'They are complex products and the FSA is carrying out analysis of this market, -including consumer research, and is ¬working closely with firms to see where and how improvements need to be made by the industry.

'Because of this work, changes are already taking place.

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