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Are you looking for a fairer bank?

Recent stories in the UK press have made many Brits more than a bit cynical about their banking system. From reports that high level bankers were fixing interest rates, through to technical problems with several big names leaving customers unable to access their accounts, times have been turbulent for the market.

Are you looking for a fairer bank?

One upshot of this is a reported rise in the number of individuals making enquires about 'ethical banks' . This umbrella term is mostly associated with financial institutions who refuse to lend to firms they see as operating unethically while supporting those who put their profits to good use. However, it's not just the ethics of some of the main high street banks that are currently being questioned - their products are also coming under scrutiny.

Most recently, the Financial Services Authority - the organisation charged with policing the finance sector in the UK - issued new rules requiring banks and building societies to check whether customers would be eligible to use 'benefits' offered as part of a packaged bank account. A statement was published in response to the growing number of complaints the group are receiving about customers being upgraded to paid-for accounts that offer a number of 'benefits' such as mobile phone or travel insurance, with customers either not qualifying to make claims or not requiring the package as they are covered by other means.

Sheila Nicoll, FSA director of policy, said: "These products are often referred to as upgraded accounts but if you end up paying for an element you can't claim on, it's money down the drain.

The Authority is now compelling banks to check whether customers are suitable for individual policies included in such packaged accounts and forcing them to provide an annual statement of eligibility so that customers can work out whether they wish to continue to pay for the account. To read Ms Nicoll's full statement, see here.

There is no question that some customers do benefit from these accounts, the problem seems to lie in the fact that they are sometimes sold to individuals who do not or cannot use the benefits and who would be better advised to keep a non-paid account in order to make their money go further.

Customers who want to look beyond interest rates and benefits when choosing current account may want to have a look at information provided by the Fairbanking Foundation. This not-for-profit organisation analyses products and firms to assess the measure of financial well-being they deliver to those who bank with them.

One example of such a product is the current account offered by Secure Trust Bank, which operates online. The bank have been awarded a three-star Fairbanking Mark by the charity in recognition of their efforts to keep customers up to date with their financial situation and offering of budget support.

If you are unhappy with the conduct of your bank, or feel you are paying over the odds for a packaged account you don't use, you may want to investigate the work of the Fairbanking Foundation and their accredited partners before making a switch.

1 comment:

  1. Similar problems exist here in the U.S. It makes it difficult to get out of debt when the banks are charging such exorbitant fees not only to loan money but also to hold our money.