Banks should open up on packaged current accounts

Packaged current accounts might sound a little like an early Christmas present from your friendly financial service provider but their terms and conditions ought to be made more explicit and transparent than is currently the case, at least that’s according to one of the UK’s leading consumer groups.

Figures have shown that the number of packaged current accounts on the market has more than doubled over the five years to 2011 and Which? has expressed concern about these apparently opaque personal finance products.

The claim from the consumer group is that packaged current accounts are designed to offer a combination of services beneficial to individual consumers but are going largely underutilised by the people they are supposed to be benefiting. Which? wants to the Financial Services Authority to take a lead on moving the industry towards what it sees as more consumer-friendly practices.

“Banks have a responsibility to make packaged accounts more transparent by clearly explaining what each of the individual elements are worth, so customers can compare,” said the organisation’s executive director Richard Lloyd.

The importance of the issue of how packaged current accounts are being sold to personal finance consumers in the UK was highlighted by figures from the research company Defaqto, which recently reported that the number of such products available has risen by 109 percent since 2006. Five years ago there were just 33 packaged current accounts on the market compared with 69 at the last point of assessment.

The same piece of research found that packaged current accounts presently represent around 17 percent of the wider current account market in the UK. There are estimated to be some 54 million current accounts in use around the country.

With a growing number of packaged current accounts being made available, there is all the more reason for consumers considering opening such an account to do their homework and seek advice on which provider offers them the most suitable or attractive package. Increased competition among banking groups and financial service providers at least should go some way towards ensuring benefits of packaged current accounts are made more evidently useful for consumers around the country.

Tags: banking, banks, package bank accounts, personal finance

Category: Advice, Banking, Borrowing, Money