Packaged Bank Accounts offered perceived benefits for customers in return for a fixed monthly sum. For many people, the benefits were irrelevant, offered poor value for money or the benefits would never have been payable.
In some cases, some customers were mis-informed that they needed to take a packaged account to obtain an overdraft, mortgage or loan.
There are approximately 10 million UK adults with a packaged bank account. Most of the accounts include products such as travel insurance, mobile phone insurance, car breakdown cover, airport lounge access and a range of discounts on products and services.
An investigation by Consumer group Which? Found that 1/3 of people with packaged bank accounts had never used any of the benefits. As a result, this could amount to £240-£320 million in wasted bank fees every year.
How were packaged bank accounts mis-sold?
The Financial Ombudsman reported that there were a number of cases where clients did not know that they had a packaged bank account; this was because the paid account was upgraded without their knowledge.
People who have an overdraft might see the word “charge” on their statement and believe that this is an overdraft charge when it’s actually a charge for a packaged bank account.
If you don’t know if you’ve got a paid-for account you can look at your statements for the word charge.
If your packaged bank account had been mis-sold then you should get back all the monthly fees that you have paid plus interest. E.g if you’d been paying £24 a month for 2 years you will receive £24 x 24 (months) £576 + £46.08 (8% interest) = £622.08*
You should receive 8% in interest on any claim, this is because it is predicted you would have made this amount of interest if you had not paid for the packaged bank account.
If your packaged bank account is still active or ended within the last six years then you can set up a claim. If you closed your account over six years ago then it could be a little more difficult. This is because banks don’t need to keep records that are over six years old but because there is no cut off if you still have your paperwork then you can still set up a claim.
Packaged bank accounts can cost between £6.50 -£40 a month and are offered by a range of banks under various names, such as “Account Plus”, “Premier Account”, “Gold Account”, “Privileged Account” and finally, “Reward Account”.
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* If you choose to pursue a claim with us we will send you some paperwork to complete to start the claims process. Once you return the paperwork we will commence the claims process. If the claim is successful, our fee is 30% + VAT. A fee may be payable if you cancel after the cooling off period or we are successful in reclaiming any redress.
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