Lloyds to axe current account sales
Lloyds TSB is temporarily pulling the plug on sales of its paid-for current accounts amid a clampdown on the industry by the City regulator.
The banking giant charges up to £300 a year for the accounts, which include add-ons such as travel and mobile phone insurance and car breakdown cover.
From January 1, Lloyds will stop offering its “packaged” accounts in branches and over the phone, although customers can still sign up for them on the bank’s website.
A Lloyds spokesman said sales were being halted so that the bank can put system changes in place and bring the way it sells such accounts into line with its sister bank Halifax.
He rebutted suggestions that the move follows concerns that some accounts may possibly have been mis-sold, and said it was also unrelated to a recent crackdown on sales of packaged accounts by the Financial Services Authority (FSA).
The regulator confirmed last week that from March 31 next year banks will be forced to provide packaged account customers with annual statements to make it easier to check that products are suitable.
Its new rules will also mean providers have to check whether customers are eligible to claim on insurance cover before selling them a packaged account. This follows concerns that people are being sold perks that they will never be able to claim on, such as travel insurance being sold to people who are too old to fit the criteria.
The Lloyds spokesman said of the bank’s plans: “It is not about the FSA or mis-selling, it is about moving to a unified process within the group.”
Lloyds and Halifax currently have two different sales processes and Lloyds is moving to the way that Halifax makes its sales. Halifax sales staff offer their customers a list of accounts and let them make their own selection, which is a process known as “informed choice”. At present, Lloyds staff recommend different accounts to customers.
Lloyds plans to re-enter the market at some point next year, although the spokesman could not confirm exactly when this would be or whether the accounts will undergo a revamp.
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