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Packaged bank account mis-selling

Did you know, if you’ve been mis-sold a packaged account in the past you may be able to reclaim the fees plus interest from the bank?

Although there are rules in place to prevent mis-selling, over the last couple of years packaged accounts have come under scrutiny and it was found that many people had been mis-sold a packaged account and were entitled to compensation.

Common ways packaged accounts have been mis-sold

Some people are owed a refund of fees paid for PBA’s because they were mis-sold products that were of no use to them. They have a right to reclaim the fees they paid, plus interest.

Typical mis-selling cases include:

  • You were told you needed the fee-paying account to secure a deal on another product

Customers are often told by their bank or building society that packaged bank account is essential for obtaining other products that they need such as a mortgage, overdraft or personal loan. This can be as blatant as a salesperson lying to a customer, or they simply won’t be informed about any free alternatives.

  • Too old for the insurance policies

For example, someone was sold an account with packaged travel insurance when they were above the upper age limit applied to the product. This is a significant problem with packaged bank accounts. The most common example is people not being able to claim travel insurance because these policies tend to have upper age limits. A claim of mis-selling can be made if you were not informed of such restrictions or if the bank failed to check if you were eligible.

  • You were pressured or misled into taking the account

The FCA has stated that packaged accounts are “sold rather than bought”. Quite often, people have felt that the salesperson they encountered put an enormous amount of pressure on them to make a sale. For example, if the salesperson you encountered was very pushy and wouldn’t take no for an answer, you can make a claim.

You can also make a refund claim if you were misled during the sales process. Being told you were eligible to claim when you weren’t, not being informed of the full cost or wrongly being told that you wouldn’t be able to access other products without the account are all examples of being misled.

New rules have been enforced in March 2013 to stop such high-pressure tactics, but you can still claim if you made a purchase under duress.

  • The price went up or a fee were added without your knowledge

Banks have a duty to inform their customers of any change in prices. However, it is often the case that prices are increased without any further notice.

There have also been many cases where consumers were completely unaware of any additional fees until they checked their bank statements. Sometimes such an error can be a mistake by the bank, an overly-enthusiastic salesperson or even a deceitful tactic.

Such an occurrence can happen when you get an account for the first time or existing customers are “upgraded” without their consent. Therefore, it is essential that you read your statements and look for any irregular outgoings.

  • You were forced to keep a packaged account when you asked to cancel it

Some people have been told by their banks that they had to keep their packaged bank accounts when they tried to cancel them. However, if is difficult to distinguish between being forced or staff simply encouraging that you keep the account. The latter is less likely to be viewed as mis-selling, unless high-pressure tactics were involved.

  • You weren’t told you needed to register your phone or car to get the packaged insurance

If you go to claim your phone or car following an incident, only to find that you haven’t registered your phone the claim won’t go through. You are entitled to a refund if you didn’t know about registering your items.

  • You were told it was the only way you could get an overdraft

Sometimes, packaged bank accounts do have higher maximum overdrafts than normal, free accounts. Nevertheless, mis-selling occurs when there are other options available, but you weren’t informed.

  • You were told it would improve your credit score

A packaged account won’t improve a credit score, only good financial management. If you were told otherwise, you are entitled to claim a refund.

PBA Fee calculator and Claim Form

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