UK financial analysts speculate that packaged bank accounts (PBA) could follow the payment protection insurance scandal.
Most PBAs have been sold alongside new bank accounts two decades ago as a promotional package to lure in more consumers.
However, not all the consumers needed the benefits provided. These included duplicate personal injury, travel and health benefits included in the accounts. Most bought the policies because they needed one of the perks or due to the unethical sales tactics of bank employees.
Mof Gimmers, editor in chief of BitterWallet.com, said the spread of PBAs was similar to PPI mis-selling, earning it the potential to become the next-stage PPI claims scandal.
Gimmers claims that according to his insider reports, banks placed pressure on consumers to take the PBAs when they first opened an account in a bank to apply for financing. Bank employees said the PBAs were required to apply for loans. Consumers also heard they needed the PBAs to withdraw their cash or use their overdraft benefits, if any.
According to analysts, the PBA scandal could reach about £10.5 billion in repayments.
Consumers have continued to rise in number claiming for PBA benefits they deemed were useless.
In the defence of banks, the Financial Ombudsman Service said most of the PBA’s benefits were quite useful to other consumers but some have no use for the added benefits and repayments to their monthly dues.