Banks to act on packaged accounts Lloyds TSB and Bank of Scotland will suspend telephone and branch sales of packaged bank accounts next year, as fears grow that the product could spark the next consumer mis-selling scandal. The move follows new rules announced by the regulator designed to clean up poor sales practices of the accounts. These new rules mean that next year, more than 10m customers with paid-for current accounts will be sent a letter telling them whether or not they are eligible to use the benefits included. Charities and consumer groups say that many customers have been sold packaged accounts containing extras that they cannot use. Cancer charity Macmillan, for example, said that it had been contacted by a number of customers who had been sold packaged accounts without being told that they were unable to make use of the travel insurance they were paying for. One in five bank customers in the UK is thought to hold a paid-for bank account. There are now more paid-for accounts being opened than free ones. Packaged current accounts such as the Lloyds TSB Gold account charge a fee of about £300 a year in exchange for perks such as travel or mobile phone insurance. However, recent industry research found that up to a third of customers do not use the benefits included. A separate report from campaign group Which? found that customers were paying above average rates for the insurance included. In 2010, the regulator warned that the lingering effects of the credit crunch and the recession had put banks under considerable pressure, which could lead to inappropriate product sales to customers. New products such as packaged accounts were emerging "which have similar characteristics to PPI [payment protection insurance]," it said. Mis-sold PPI policies have cost the UK's five largest banks more than £10bn, putting pressure on the industry to reform how it sells products to consumers. Lloyds Banking Group, which is the UK's largest provider of current accounts, insisted that its decision to suspend packaged bank account sales was not motivated by mis-selling fears and was simply a move to harmonise the way that sales were made across all brands. "Embedding this change properly across our business will require us to update our systems, and amend the sales process and training we provide to colleagues," it said. We are committed to offering packaged accounts as we believe they offer real value to our customers, which is why we expect to fully re-enter the market later in 2013. The suspension will only apply to purchases where a salesperson is present. Paid-for current account opening online will still be available.