Savers paying for unused services
According to consumer finance website uSwitch.com, 11 per cent of account holders pay a total of £530 million in fees, but a quarter of holders ignore the perks they are paying for.
More worrying still, the website claims that banks could be automatically upgrading people to these charging accounts, with 1.3 million believing this is the case, adding to debt people could be taking on.
Nick White, head of personal finance at uSwitch.com, said: “In effect, packaged accounts are allowing banks to charge customers for the privilege of being cross sold additional financial products.”
Banks are constantly looking for ways to improve their earnings due to record bad debt levels and possible action from the Offie of Fair Trading which would limit earnings.
However, Mr White called for banks to act as responsible lenders and to not automatically “upgrade” free accounts to ones that charge and thus risk pushing people into debt.
Nick White stated: “Persuading customers to take out a packaged account is one thing, but if banks really are automatically upgrading people to a fee paying account it could be described as unethical.”
