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Another Mis-selling scandel

Posted by on in Financial Services Blog
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The banks have been at it again, this time getting caught miss-selling insurance against card fraud and charging customers over £1 billion in the process.
With so many major purchases now being carried out online using a credit or debit card surely insuring against the risk of your card details being used without your knowledge is a sensible thing? It would be if such misuse was your problem. What the banks neglected to tell you was that, provided you hadn't been reckless and negligent with your card, the problem of card fraud was theirs and not yours.
To make matters worse this insurance was being miss-sold while the banks were paying out billions of pounds in compensation for the PPI miss-selling saga! The series of miss-selling scandals will continue until such time as "free" banking ends. I like things to be free as much as the next person, but the reality is banking isn't free. There might be no monthly fees to have an account or charges for most transactions but the banks only offer this free banking in the hope they can make money out of you in other ways, such as selling insurance you don't need or levying horrendous overdraft charges.
We are all partly to blame for believing we get something for nothing. If a window cleaner said I'll come and clean your windows every month and it's completely free you'd ask "where's the catch?" But when a bank says you can have an account for free and use it as much as you like, forever, we take it at face value.
Even where current accounts do have a monthly fee they don't want you to think it is for using the account, instead we are told it's for "bundled" products, such as mobile phone insurance or to get a higher interest rate on the first portion of the balance. Despite the regulations that were introduced last year tightening up on the sales of these accounts I think it is only a matter of time until claims of miss-selling are made about them and so the cycle will continue.

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