Banks have been accused of trying to boost profits by using agressive tactics to sell customers financial products that they neither want nor need. Consumer groups say that lenders hit by the credit crunch routinely give the hard sell on insurance, credit cards and fee-charging current accounts every time a customer visits a branch or calls a telephone helpline.

Kevin Mountford of Moneysupermarket.com says: “The market for fee-charging accounts in particular is tarnished because some banks have applied poor sales processes, trying to shoe-horn customers into products without explaining the features. The banks need to create better value and more transparency.”

Times Money readers also report being asked to make official-sounding appointments to “review their accounts”, only to be pressurised into buying unwanted products. Doug Taylor, of Which?, the consumer organisation, says: “Banks will always look for ways to maximise their profits. Payment protection insurance (PPI) and bank charges have been cash cows in recent years, but both of these revenue sources are now under serious threat. More effort should be put into meeting customers’ needs, and less into selling them additional products that they do not want or need.”

So what are banks trying to sell — and are these products worth buying?

Fee-charging current accounts

These involve paying about £15 a month to access a range of extra benefits, such as travel and home insurance and discounts at restaurants and the cinema. However, critics say that the so-called benefits can be overpriced and not tailored to customers’ needs.

Andrew Hagger, of Moneynet.co.uk, the comparison website, says: “Banks love to sign up customers for these deals because they provide a guaranteed stream of monthly income. However, consumers should not be swayed by the long list of wishy-washy benefits that they will probably never use.”

Some of these accounts also tie in customers. For example, NatWest Advantage Blue and HSBC Plus have minimum contracts of 12 and six months respectively.

The Lloyds TSB Platinum account costs £17 a month (£204 a year) and includes worldwide travel insurance, mobile phone and AA breakdown cover. But these policies can be bought separately at much lower cost. Hayley Parsons, of GoCompare.com, the comparison website, says: “A worldwide travel policy can be bought for about £50, mobile phone insurance is a couple of pounds a month — though it is sometimes covered under home contents insurance anyway — and a breakdown policy can be bought for as little as £23 a year.”

The Financial Ombudsman Service (FOS), which resolves disputes between consumers and banks, has received a significant number of complaints about insurance linked to current accounts. Emma Parker, of the FOS, says: “Many consumers are not aware of policy restrictions. For example, customers with mobile phone insurance may not realise that they must register their phone details with the insurer before they can make a claim.”

Hidden in the small print of the RAC breakdown cover included with the Halifax Ultimate Reward account, which costs £12.50 a month, is that customers must pay the towage costs if they wish to be taken more than ten miles from where they broke down.

Ms Parsons says that it is also important to check the travel cover. “Lloyds TSB, for example, offers a range of fee-based accounts and the level of travel cover varies,” she says. “The Silver account provides only European cover, and winter sports cover is not included unless you sign up to the Platinum or Premier accounts.”

Many fee-based accounts offer “preferential rates” on savings. With the base rate at 0.5 per cent, consumers may find this tempting, but better deals can often be found elsewhere. For example, the Co-Operative Bank’s Privilege current account offers a linked savings account paying 0.75 per cent. A higher-paying alternative is the Stroud & Swindon Building Society, paying 2.25 per cent on its easy-access postal account.

The HSBC Plus package, at £12.95 a month, offers a regular saver account paying 10 per cent, but the small print reveals that it may not be such a good deal. The account is only available “from time to time”, according to the HSBC website, and savers are restricted to deposits of £250 a month, with no withdrawals allowed.

Consumers who go overdrawn regularly may be enticed by preferentialrates and fees on overdrafts, but the savings must be weighed against the cost of the account.

The Privilege Premier account from the Co-operative Bank costs £144 a year and offers a £300 overdraft with no fees or interest. However, a £300 overdraft for 12 months at the average rate for standard current accounts — 14.4 per cent — would cost £43.20.

Home insurance

Banks often try to sell home insurance when a customer is buying a mortgage or even informing the bank of a change of address. Customers can also find themselves under pressure to buy life cover and payment protection insurance alongside a mortgage. Experts fear that many consumers may mistakenly think that they have to buy these policies from their bank.

Darren Black, of Confused.com, the comparison website, says: “Many people think that they are more likely to be accepted for a mortgage if they take home insurance with their bank, and that claims on the policy will have a greater chance of a payout because the bank has a vested interest in the house being maintained. Both of these are untrue.”

Consumers can save an average of £140 a year on home insurance by shopping around. “While it is a condition of mortgages to have buildings insurance, there is nothing to say that it cannot be sourced independently,” Mr Black says.

Identity theft insurance

Cifas, the fraud prevention agency, says that there was a 40 per cent increase in the number of people falling victim to identity fraud in the first quarter of this year, compared with the same period last year.

With consumer fears increasing, many banks are trying to sell identity theft insurance, costing up to £90 a year. Barclaycard, for example, tries to sell this cover when customers call to register replacement credit cards.

This type of insurance does not cover losses arising as a result of fraud, which banks should pay anyway, but covers legal costs and provides access to your credit file.

Martyn Hocking, of Which?, says that the policies can be a waste of money, adding: “Under the Consumer Credit Act 1974, you are not liable for debts run up by a fraudster, provided that you have acted honestly and used reasonable care. The most you will pay is £50, and credit card companies often waive this.

“You can obtain your credit files for only £2 each from the three credit reference agencies — Call Credit, Experian and Equifax.”

You may also be covered for identity theft insurance under your existing home insurance policy, since many policyholders have an add-on — costing about £20 a year — that provides access to their insurer’s legal service. This service can help consumers to deal with lenders and credit reference agencies after becoming a victim of identity fraud.

Be on your guard

• If you are asked to make an appointment to “review your account,” this is likely to involve selling products.

• If your credit or debit card is lost, banks will often try to sell identity theft insurance when issuing your new card.

• When buying a mortgage or moving house, your bank may push various insurance policies.

• Banks routinely try to sell savings, credit cards and personal loans to existing customers.

Better deals can often be found elsewhere on comparison websites.

Case study — Hassled every time I visit my branch

Lynda Lee, of Bakewell, Derbyshire, says that she is “totally fed up” with her bank and building society trying to sell her various products whenever she goes into one of their branches.

Mrs Lee, left, is in the process of a buying a new house and has made several visits to branches of Nationwide and NatWest recently to move money around. The 55-year-old says: “Whenever I put money in or out of an account, the cashier always asks ‘do you have any plans for this money?’, as if I need to explain my transactions.

“It is clear that staff members are given targets or incentives to sell as many products as possible. But when there is a queue forming behind me in a branch and all they’re interested in is selling me a new current account or investment product, I find it very frustrating.”

Mrs Lee thinks that the problem has grown worse over the past 18 months, adding: “I am often asked if I have a mortgage or would like a quote for my home insurance. I have also been offered a fee-paying current account, but I always refuse. It seems like a way for banks to squeeze more money out of customers.”