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Consumers warned over packaged bank accounts
July 19, 2010
By John Rowling

Consumers in the UK have been advised that some packaged bank accounts may not provide good value for money.

Several banks are increasingly pushing paid-for accounts - which often offer perks such as mobile phone insurance or travel cover - as they strive to get back into profit, with some seven million people currently using one.

However, financial advisors have warned that the extras may be unsuitable and represent poor value for money.

The Financial Ombudsman Service has pointed out that some banks are mis-selling packaged accounts, noting that many of the perks can be bought separately at a lower cost.

Spokeswoman Emma Parker said her organisation has received around 500 complaints from customers on the issue.

"People are either saying that they did not understand how much they were paying for the benefits, or that they never realised there were limitations to the cover provided," she said.

"In the case of mobile phone insurance, for example, this may already be available free on an existing household insurance policy."

According to recent figures from research company Defaqto, the number of packaged accounts has almost doubled during the last four years.

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