Unauthorised Current Account Upgrades 'Must Stop'

The unauthorised upgrading of current accounts must stop, as it does not benefit consumers, one expert has claimed.

A financial advice website made the assertion, noting that thousands of consumers have monthly fees charged to their accounts, after providers elevate the status of products that were initially free.

Essentially, this means that consumers must pay a charge to maintain the same product they were enjoying free of charge.

The website's comments follow the publication of a survey, conducted by Which? that suggested many current account customers would fare better with a current account that is free. For additional services, consumers can often get a better deal elsewhere, rather than paying their regular provider out of ease.

According to consumer watchdog Which?, around a quarter of current accounts are now sold as packages that contain paid-for extras.

A survey conducted by the body found that that 12 per cent of people with package accounts used the advantages they were paying for, suggesting that these add-ons may provide genuine added value.

However, another ten per cent of respondents said they did not use the add-ons, while 78 per cent said they only used some of the additional services.
A fifth of participants in the poll claimed they had been upgraded to a package account without authorisation.

The study by Which? found that consumers could be spending up to £300 a year unnecessarily on packaged accounts.

Meanwhile, the Office of Fair Trading (OFT) revealed that it is currently investigating the regulation on unarranged overdraft charges under the Unfair Terms in Consumer Contracts Regulations 1999.

The OFT has revealed that it expects to make more substantive comments on unarranged overdraft charges in due course after the pending Supreme Court judgment on this matter.

The chief executive of the Office said: "As consumers become more aware of the costs of their account and more confident in switching, as a means to get better value, so banks will need to offer more competitive and innovative products and services to attract as well as retain customers."

If you would like to know more about current accounts why not ask AnswerBank Business and Finance.