Guide To Package Bank Accounts
If you’re paying a monthly fee for your bank account, there’s a chance you may be able to reclaim £100s or even £1,000s, as many of these accounts were mis-sold.
This guide will go through everything, step by step, and explain how to reclaim packaged bank account fees.
What's On This Page?
Click the links below and head straight to a specific section of the article.
- What is a Packaged Bank Account?
- The Mis-selling Checklist
- How Far Can I Claim Back?
- How Much Can I Get Back?
- How To Make A Claim
- What Happens If The Bank Refuses?
- How Long Does The Process Take?
- What Happens If The Financial Ombudsman Service Reject Your Claim
- What is a claims management company?
What is a Packaged Bank Account?
A packaged bank account is where you pay a monthly fee for your account in return for benefits which can often be insurance cover for travel, mobile phones and car breakdown all bundled into one.
If you've chosen one based on what you consider quite a rational decision, then it’s quite likely a good account as they can be the cheapest way to get many types of insurance.
But if you felt pressured by a pushy sales agent or told you could only get a mortgage if you opted for the account, or it was added without your consent, you could be owed some serious cash.
Banks have been found guilty of mis-selling many of these accounts.
If you feel the insurance is having zero benefit, it’s better to just cancel your account now, and if you don't need the insurance, then packaged accounts aren't right for you. It’s as simple as that.
If you do, you should see whether it's cheaper to buy the insurance elsewhere. You can do this by multiplying the monthly cost by 12 to get the cost per year, this is a good way to compare insurance costs to see if it's worth it.
Compare the price your bank offers to what it would be independently, if the price isn’t justified then you should cancel and switch to a fee-free account.
If you were mis-sold, don’t worry you can still reclaim.
If you are unsure about being mis-sold, the account fee will show up as a transaction on your bank statement, under the name of the account you're signed up to. Go through your current and old statements, or call your bank and ask for copies of old statements.
If you find the transactions and don't remember signing up, it could be a sign you’ve got grounds to make a claim.
Collect as many statements as you can that contain them as you will need the evidence.
The Mis-selling Checklist (mix these around)
Mis-selling can happen in all sorts of ways, sometimes it’s obvious, other times you can be mis-sold without even realising.
It’s also worth noting that mis-selling doesn't just happen at the point of sale, it can happen at a later stage. For example, if you weren't told you had to register your phone or car for the insurance to be active.
To help, we’ve listed out a mis-selling checklist, if you fit under any of these categories then it's likely you may have a case.
1. You were wrongly advised you had to get PBA
Often, customers would be told that it was a requirement to sign up to a packaged account in order to to get a loan or mortgage, or their application is in danger of being declined if they didn't get a packaged account. This is definitely considered mis-selling.
Sometimes it’s quite clearly been mis-sold but other times it can seem less obvious. If you have legitimately benefitted from a cheaper rate on a mortgage or loan as a result of having a packaged bank account, then it's likely you weren't mis-sold and the only risk would be if there was a free, or cheaper alternative that would have given you the same benefit.
2. You were ineligible for the insurance
One of the main issues with these accounts is people signing up under the pretence that the insurance protected them, but when they went to claim, they were told they were ineligible.
If the bank hasn’t checked to see whether you were eligible for the insurance each year then you could have a claim.
A good example would be if someone was considered too old to claim on travel insurance, as these policies often have age restrictions, but also if you weren't asked if you had any issues that may have stopped you from claiming, eg, a medical condition that may invalidate travel cover.
If the insurance was on a joint account and one person was considered ineligible, you can still claim for half the fees and interest back.
3. You were misled when taking the account
A few examples of being misled would include:
The product wasn't ever fully explained to you.
The sales person was pushy and you felt pressured to get one
You were told you were eligible to claim when you’re not.
You were wrongly advised that you'd get large discounts on other insurance if you took out a packaged account.
The full costs were not explained to you.
4. Fees were added without your knowledge
Many people don’t even realise they have a paid-for account until looking through their statement, could be an error or could be the result of someone adding without your permission.
Whether it’s getting an account for the first time or an existing customer being 'upgraded'. This can happen without your consent.
We recommend looking through old statements to see if you’re paying out £10+ for an account you didn't sign up for.
5. You’ve tried to cancel but were told to keep it
If you have tried to cancel your account but were told you had to keep it then it’s likely you’re able to make a claim.
Although, you need to be certain that you were forced to keep as opposed to being strongly advised as it’s less likely that you’ll have a claim unless pressure tactics were being enforced.
6. You were advised it was the only way to get an overdraft
If you went to your bank to ask for an overdraft and were told the only way you could would be through a packaged bank account, you could have been mis-sold.
However, some packaged bank accounts have higher maximum overdrafts than free accounts so you’d need to check. If other accounts have overdrafts at the level you wanted, then there’s a chance you could have a claim.
7. You were not told you need to register your phone/car
An example of this would be if your phone gets stolen and you think your packaged account will cover it but when you go to make a claim, you’re not covered because it wasn’t registered.
8. You were told having a PBA would improve your credit score
A packaged bank account will not specifically help you improve your credit score, if you were told this and took out a claim as a result, then you could have been mis-sold.
9. The prices rose and your bank didn’t tell you
Although this isn’t technically mis-selling, it's still a valid reason to make a claim as you need to be told about a price rise.
How Far Can I Claim Back?
Although there is no time limit on how far back you can claim, the further back you go, the more difficult it will be to complain, but it is still possible.
So even if something was sold more than 10 years ago if the firm was regulated at the time and you were not aware of the issue until recently, you could still make a complaint.
How Much Can I Get Back?
If you were mis-sold then you should get back all the fees you paid out, for example, if you paid £15/month for two years you should get £360 back (£15 x 24 months).
As well as a base income you should get 8% annual interest on any claim, this is on the basis that you'd have earned money on that amount had it not been taken from you.
This is calculated at a flat 8% a year – and it's not compounded, so you don't get interest on the interest.
Be careful, banks have been known to change the insurance so customers become eligible, as a way of appeasing complainants. This doesn't change the fact that you were still paying for ineffective cover in the past, so make sure you make the point of wanting all your fees back.
How To Make A Claim
Firstly, you need to make a complaint to your bank. Either speak to them directly or check the website for the address of the complaints department.
It’s best to sort these things in writing, but if that's too difficult, you can still call. Ask if you can have it noted down as a formal complaint and have it as written confirmation.
Think carefully about why you have not been treated fairly and be as clear and concise as possible explaining why you have been wronged.
What Evidence Do I Need?
You will need the following:
Your account number
The reason you think you were mis-sold (can refer to our checklist)
The date you took out the PBA
Copies of your statements or other relevant documents
What Happens If The Bank Refuses?
Financial Ombudsman Service
If your complaint is rejected by the bank, you have the right to take your complaint to the independent Financial Ombudsman Service.
This is the official service for settling disputes between individuals and financial companies. It's a free service acting as an impartial adjudicator.
They will decide whether your account and the circumstances it was sold were deemed unfair, then decide whether a refund is required.
Again, similarly to the bank, explain your situation as clearly as possible, all in your own words, don't feel you have to be formal, explain it just as you would to a friend.
If you need any advice though, you can call the Financial Ombudsman Service helpline on: 0300 123 9123 or 0800 023 4567, and they will guide you through the claim.
How Long Does The Process Take?
Sometimes it can take up to a year, possibly even longer. However, you can leave your claim with the ombudsman to resolve and they will contact you with any news from your bank.
What Happens If The Financial Ombudsman Service Reject Your Claim
If your claim has been rejected by one of the adjudicator’s at The Financial Ombudsman, you can ask for a formal decision to be made by one of the official ombudsman.
You should explain in writing why you disagree with the original decision and provide any additional information that could support your claim.
An official decision from an ombudsman can take several months as it involves a thorough investigation.
While the bank has to accept the ombudsman's decision, you can still take the company to court if you don't agree with the result.
If you feel the case hasn't been handled correctly (significant delays etc) you can have it reviewed by a senior manager.
You've also got a right to go to the Independent Assessor who will look into the quality of service you received, not the actual decision made.
What is No Win No Fee
A 'no win, no fee' agreement is sometimes referred to as a ‘conditional fee agreement’ this is an arrangement between you and your chosen solicitor. The benefit of this is if your compensation claim is unsuccessful, you will not have to pay a contingency fee for your lawyer's services, a Termination Fee can sometimes apply.
What is a claims management company?
Money Back Helpdesk is a trading style of Lead Insight, Lead Insight is a Claims Management Company. Claims management companies are here to help consumers make claims for various products and services. We deal with the paperwork and administrative details for a cost, in the process trying to make the process of claiming as stress-free and seamless as possible.
The solicitor will handle the whole claim for you, representing you and dealing with whatever body it is that you are making a claim against.
Our panel of solicitors handle a variety of different claim types, from Housing Disrepair to Mis-sold Car Finance, for a fee that is either taken as a percentage of the final pay-out or a lump sum payment or sometimes both.
You do not have to use a claims management company to pursue a claim. You can always contact the organisation directly and make use of the Financial Ombudsman Scheme if dissatisfied and should the claim be one which falls into their jurisdiction.
If you feel as if any wrongdoing has been done, you should now have a better idea of how to make the appropriate claim.