Paid for current accounts may become the next retail banking scandal, the UK financial ombudsman has warned.

The Financial Ombudsman Service (FOS) has reported in an annual review that a number of customers are unhappy with paid accounts offered by major high street banks.

The number of complaints on paid-for accounts has risen by 92%, says the watchdog.

The complaints highlighted customers’ frustration with elements of paid-for current accounts including unsuitable insurance deals.

The financial watchdog reports that customers have complained that when trying to claim on their insurance they have been denied due to age or type of product they own.

The FOS also warned that banks are switching customers to paid-for accounts without their knowledge.

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Rory Stoves, spokesman for the FOS said: "As with PPI, customers are being sold packaged accounts by banks that are often unaware of a person’s situation. People have found themselves with add-ons they cannot use because they are too old for the travel insurance or their phone is too expensive."

Paid-for accounts can cost from £6.50 to £40 and offer a variety of extra benefits such as holiday and mobile insurance and downloadable movies and music.

A fifth of adults in the UK are paying for their current accounts.

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