And The Next Bank Misselling Scandal Is……

Now I appreciate that PPI claims are still being settled and there are still billions to be paid out. However, just to wet your lips for what’s around the corner……

 

The Next Bank Misselling Scandal Is……Premium Banking

 

The Background……

All of the high street banks offer Premium Banking (AKA ‘packaged accounts’) where the customer pays a monthly fee in return for additional benefits ‘exclusive’ to Premium Banking customers. These additional benefits typically include Travel, Mobile and Car Breakdown Insurance.

 

The Issue……

When we look at the PPI issues, credit card / loan customers took out additional insurance (many were forced) to ensure that the monthly debt payment was made in times of sickness or unemployment. However, many of these customers could never make a claim on the insurance as they did not meet the criteria (too old, self-employed, unemployed, too tall, supported the wrong football team, wrong colour shirt, left handed……you get the picture!) and should never have been sold the insurance in the first place. Hence, they were missold.

 

Now let’s look at Premium Banking……you pay a monthly account fee to have additional insurance benefits. Many customers can’t claim on these insurances as they do not meet the criteria:

 

- Many types of holiday are not covered (skiing, Asia, South America, diving)

 

- Mobile could be insured with the telecoms provider or covered under Home Insurance

 

- Car breakdown cover not valid if using the car for work or commuting

Do we really believe the banks have done their due diligence with customers to ensure that they get full benefit from the additional features? I think not. There are literally millions of people paying monthly fees via Premium Banking for insurance they cannot claim on or they are insured identically elsewhere.

 

The next misselling scandal? Damn right.

 

Form an orderly queue please.

 

Surprisingly unsurprising.