Santander to close packaged accounts from October

Published by Mark King on 18 July 2013.
Last updated on 18 July 2013

Santander

Santander is to scrap its packaged accounts, with existing customers moved to its fee-free Everyday Current Account from October 2013.

The move, thought to affect 300,000 customers who pay a monthly fee for their packaged account, will see people lose the added benefits they pay for, such as insurance.

Santander stopped selling packaged accounts to new customers in March 2012, but has now decided to switch all customers from the packaged accounts – costing between £10 and £20 a month – to free accounts.

Reza Attar-Zadeh, director of retail banking at Santander, said: "We want to improve service for customers, and to do that we know we have to simplify our product range.

"Our view is that customers want even better service and a range of products that is easy to understand. Simplifying our current account and savings product range is an important milestone in helping our service get even better."

New rules

In March 2013, the City regulator introduced new rules on packaged accounts to prevent mis-selling, stating that banks will have to check that customers are able to claim on insurance before selling them costly packaged or 'upgrade' accounts.

See top bank accounts available to you today

But Santander was a smaller player in the packaged accounts arena, with a market share of about 3% at its peak.

The five packaged accounts affected are: Reward, Premium, Travel Reward, Family Reward and Premier 50.

From 19 October 2013 all insurance and assistance benefits will be removed from packaged accounts and customers automatically switched to the Everyday Current Account.

From 30 September 2014, the free travel insurance benefit will be removed from Santander's Premier and Premier Direct Current Accounts (these did not charge a monthly fee) and these accounts also automatically switched to the Everyday Current Account.

Customers will be contacted by Santander to remind them of the switch before the 19 October 2013 and 30 September 2014 deadlines.

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