Packaged Bank Accounts (PBA) can often be useful and cost-effective when provided to customers who need, want and can use the benefits offered. Unfortunately, many packaged bank accounts were sold to customers who had no need for the attached benefits. In some cases, customers were not even eligible for certain benefits so they could never receive them even if they wanted to. Were you one of these customers?
What are Packaged banks accounts?
Packaged bank accounts are current accounts that come with extra features and benefits for a fixed monthly fee.
These benefits can include mobile phone insurance, travel insurance, breakdown cover and preferential rates on loans and overdrafts as well as other benefits that are tailored by the provider. If you were to purchase these benefits individually they would cost much more than combining them into the fixed price of the packaged account.
Packaged Accounts typically have brand names which differentiate them from ordinary accounts with no attached benefits – examples are ‘Reward’, ‘Premier’, ‘Additions’, ‘Select’ and ‘Gold’ but there are many others.
How packaged bank accounts were mis-sold?
There are numerous ways in which a packaged bank account could have been mis-sold. The statements below are examples of the most common scenarios given:
- You didn’t know you were being sold it.
- A packaged bank account isn’t something you wanted, but you later found out that you’d been given one anyway and you were being charged for it.
- You were told you had to take out a packaged account to have other benefits e.g. an overdraft.
- You were told that you had to take out the account for a loan application or other product to be approved.
- You were told that there was no other choice but to have a packaged bank account, the fee-free account choices were not given to you.
- The packaged benefits were not suitable for you. You did not want or need the things that were included.
- You were not eligible for some or all of the packaged benefits. e.g. You were not within the required age range for the travel insurance, did not have a car to use the breakdown cover or did not have a mobile phone for the phoen cover.
How much could you recover if you have been mis-sold a PBA?
If your bank upholds the mis-sale complaint, they will refund all or some of the fees paid plus interest. The interest is the statutory rate of interest as outlined by the Financial Ombudsman Service which is calculated at 8% per year (15% for any period before April 1993).
Please note that this interest is regarded as income so Income Tax will be deducted by the bank before you receive your redress. If you are not a taxpayer then you can reclaim this interest by contacting HMRC.
What if your mis-sold packaged bank claim is rejected?
In the event the bank rejects your claim, you can refer your case to the Financial Ombudsman Service (FOS) if you are disatisfied with the reason. The bank has eight weeks in which to respond to your complaint and you are only able to escalate to the FOS after this eight-week period has passed.
What is the role of the Financial Ombudsman Service?
The FOS is an Adjudication Service who will assess financial complaints in an independent and impartial manner that is fair and reasonable.
Each case is assessed on its own merits when determining if anything unfair has happened which needs to be put right.
How far back can I claim?
There are rules on how far back a complaint can be made for any financial complaint.
The event being complained about, usually the sale process, has to have been within the last six years. However, if this was more than six years ago, there is then a further over-ride which allows you to still complain provided you have only known (or ought reasonably to have known) about the problem within the last three years.
So there is no limit to how far back you can claim IF you have only just found out about a problem within the last three years. Please be aware that the three year period can begin when you are made aware that you had a Packaged Account. This could have been a welcome letter or information pack sent to you in the post or you could have made an enquiry about how the benefits worked. If you knew that you had a Packaged Account but did not complain about it within three years of knowing, then you should expect to be asked more closely for why you did not make a complaint sooner.
Does it matter if I signed up for the PBA online or in branch?
How you signed up for the account can make a big difference to the reasons the account could have been mis-sold to you. For example, if you signed up online and the information provided was clear, fair and not misleading then the bank may not agree if you say that you were not provided with adequate information to make a purchasing decision. You were much more likely to have been subjected to something unfair if you did not see any information or receive any explanation about the benefits before the account was provided to you!
Can I complain if I have claimed on the insurance policy or received other benefits?
Yes you can still make a complaint even though you have claimed against the insurance policy or received other benefits. The fact that you may have used some or all of the benefits does not alter the fact that something unfair may have happened when the Packaged Account was provided to you. However, it is important to understand that if your case is upheld, the value of any benefits received will be taken into account before you receive any redress. So if the value you have received is more than you have paid for the Packaged Account, it is highkly unlikely that you will receive any compensation unless any additional awards are made for distress and inconvenience. It would be unusual to see D&I awards for a packaged account complaint.
Have you been mis-sold a packaged bank account?
Before you start your claim, it would be helpful if you have the following information:
- The name of your account;
- The date you opened your account;
- The date you closed your account if applicable.
- Details of any claims you have made or benefits received if applicable.
It will further speed your claim if you can provide us with any account numbers you have for the Packaged Accounts but this is not essential.