1-minute guide to Packaged Bank Account Claims


Packaged Bank Account Claims

An estimated 11 million people pay as much as £300 a year for current accounts with added benefits

But as many as one in five people may have been mis-sold this type of packaged bank account

You could be entitled to a refund of all your premiums PLUS 8 per cent interest on top

2 in 3 customers who complain to the Financial Ombudsman are successfully winning back their money

Need to know

  • Packaged bank account mis-selling is expected to be one of the next big reclaims
  • A packaged bank account is a current account where you pay a monthly fee for ‘perks’ but THOUSANDS of people who have been paying for a packaged bank account didn’t know these perks existed
  • These extras could include travel insurance, breakdown cover, mobile phone insurance and sometimes preferential rates on other financial products, most typically loans
  • Many customers were automatically signed up for these deals by overly pushy staff who may have exaggerated the benefits of the account. Even worse, some customers were told that these packaged bank accounts were their only option whilst others were told that if they took out a packaged bank account they would be more likely to qualify for a mortgage
  • In many cases, the perks were explained so poorly that some people ended up buying travel or mobile insurance elsewhere, effectively paying twice for cover
  • Pensioners may have been sold these accounts only to find that they were too old to qualify for the added extras
  • During the last half of 2013, the Financial Ombudsman saw a 150 per cent rise in complaints about these types of packaged bank account
  • Someone who paid £25 a month for five years for an account with breakdown cover, mobile phone insurance and maybe travel insurance could expect to get back at least £1600 if their complaint is upheld!
  • Remember, packaged bank accounts are rarely bought, they tend to be sold! It is unlikely to have been YOUR decision!
  • So, if you pay for your bank account and never use the benefits, you could probably make a claim!

Reasons to complain

  • If you felt ‘obliged’ to take out a packaged bank account by being told that it was your only available option
  • If you were not told that you could have a free account instead
  • If you were told that you had to have this bank account in order to get a loan or mortgage with the same bank
  • If you were told that you would get a better deal on your mortgage or loan if you took out this packaged account
  • If the insurance that went with the account was not useful to your particular needs (ie breakdown cover but you don’t have a car)
  • If you were not told that you wouldn’t be able to claim on travel insurance due to your age (over 65s usually) or because of illness or a pre-existing medical condition
  • If your bank account was ‘upgraded’ without you being notified
  • If there wasn’t enough explanation about the pricing and overall costs of the bank account
  • If you tried to cancel the account and were told that you couldn’t
  • If no-one told you that you had to register your mobile phone or car for the insurance to be valid

How to complain

  • If you think you were mis-sold a packaged bank account (even if you no longer have that account), you need to speak to your bank first.  Write to them giving your account details and explaining WHY you think you were mis-sold.  Click here for a template letter
  • BUT don’t get fobbed off!  Banks are apparently WRONGLY rejecting lots of complaints about packaged bank accounts…….some are saying that if you EVER went on holiday whilst you held the account then hypothetically you used the travel insurance BUT THIS DOES NOT MEAN THAT THESE POLICIES WERE RIGHT FOR YOU!!  Don’t let them bully you into thinking you don’t have a valid claim
  • If you continue to get fobbed off or you don’t hear back from your bank within 8 weeks, then go to the FREE Financial Ombudsman Service.  You can call them on 0300 123 9123 or visit their website www.financial-ombudsman.org.uk
  • Ideally you will steer clear of any claims firms as they will charge you a MASSIVE fee!  However, if you really can’t be bothered to make the claim yourself, don’t let that stop you getting the money you are entitled to.  Find a good, reliable company to do it for you – one that charges the minimum commission, is the best in market and has a VERY strong success rate
  • PLEASE don’t ever respond to a text, email or cold call – stay in control of your own claim!

The inside track

  • Although banks have recently been forced to send out letters reminding customers of the perks they have with their packaged accounts, it does not excuse them from paying your claim.  You should still complain if you believe you were mis-sold the policy
  • Some ex-members of staff have said that they were given HUGE incentives to sell these bank accounts to customers
  • In the future, remember, packaged accounts CAN be great BUT if you don’t need the extra insurance products then don’t get a packaged bank account! 
  • If you do need the insurance, do the maths!  Compare the price your bank is offering you with buying it independently elsewhere and if the policy is cheaper somewhere else, steer well clear of paying extra for a packaged account!
  • If you want to switch current accounts, there are some GREAT alternatives in our guide
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Sarah Willingham
Sarah Willingham is a serial entrepreneur, business investor and leading consumer expert. She has received a number of accolades for her contribution to business including The Sunday Times 500 Most Influential People in Britain 2016, The Times 35 Most Successful Women Under 35, Business Weekly’s Young Entrepreneur of the Year, Courvoisier Top 500 and an entry into the Who’s Who of British Business Leaders. She holds three business degrees including an MBA from Cranfield School of Management, where she is also an advisory board member.