Halifax forced to ditch Extras current account after new FSA insurance rules

Halifax is being forced to withdraw its Extras current account by the end of the year because of a new Financial Services Authority (FSA) regulation, which is expected to increase red tape when selling general insurance.

The company claims that once new regulations take effect from next year, the cost of providing the account, which offers free breakdown and travel insurance, will be prohibitive.

The move is an embarrassment for the bank, which relies heavily on the word “extra” in its marketing and uses the tagline “Always giving you extra” in its advertising.

A spokesman from Halifax says existing account holders will be unaffected, but it will not open new Extras accounts after January 1, 2005. However, he says, packaged accounts remain a prime target area for the bank. The Extras account was launched in July last year, and was supported by advertising featuring employee and brand icon Howard. (MW July 31, 2003). The Extras account attracts a lower interest rate of two per cent, rather than the standard Halifax rate of three per cent but no monthly charge.

It also offers a package of services, including free Green Flag breakdown cover and European travel insurance, as well as other insurance discounts as long as the account is open.

Halifax is heavily promoting its current accounts, and is attracting 25 per cent of the new and switchers market. The packaged account area has been heavily marketed by rival banks, which charge a monthly fee for the additional features.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here