JAMES WALKER: Packaged accounts uncovered
If you've set foot in a bank over the last 15 years, chances are they've tried to flog you a packaged bank account.
In fact, back in 2001 it used to drive me so mad I told my bank to put a note on my account so staff would stop asking me about it!
Flash forward 15 years and packaged bank accounts are back in the news again. This time there’s lots of stories about mis-selling – and claims managers are getting in on the act too.
So what’s the deal?
What is a packaged bank account?
A packaged bank account is a normal bank account ‘packaged’ with other benefits. Each month you pay a fee (usually from £6 – £25 but some accounts were much more). Every bank had a variation on a packaged account, but typical benefits included:
Higher overdraft amounts
A better interest rate
Legal aid insurance
Mobile phone insurance
Boiler or emergency cover
Are packaged accounts the next PPI?
Though packaged accounts were widely mis-sold at the time, it’s very different to the scale of PPI and there’s one big difference. Lots of people found (and still find) their packaged accounts useful.
But loads of people tell us they were mis-sold an account. Last year the Resolver team saw and explosion of cases about packaged bank accounts – over 86,000 (up from 18,000 in 2015). So this issue isn’t going away any time soon.
There are three main areas of complaint
“I never wanted the account”
The first complaint is pretty straightforward. The bank checks its records and if it’s clear you’ve been opted in without permission they may offer a full or partial refund. However, if quite bit of time has passed then you’d be expected to have noticed the fees, so a full refund is unlikely.
This may seem pretty obvious to say, but if you’ve used certain benefits – like made a claim on an insurance policy packaged with the account – then you will find it difficult to argue that you didn’t want the account.
“I was misled into taking out the account”
This issue is a lot more serious, though not always so easy to prove. If you think you were tricked or misled in to taking out the account then note down all you can remember from the time – or if you can’t recall much, tell the bank about your circumstances at the time. This can help them determine if the account wasn’t affordable or suitable.
“The benefits don’t apply to me”
This is a little different to mis-selling. The bank won’t necessarily know everything about your situation so it might not have deliberately mis-sold the account. But if you couldn’t have taken advantage of the benefits, the money you’ve paid isn’t really worth it, so you might be entitled to some of it back. For example, travel insurance often doesn’t cover people if they’re over 70, so if that’s you, it’s not worth the money.
One last thing …
We’ve said it lots of times before but regardless, don’t use a claims manager to make your packaged bank account complaint. The ones we’ve seen have been terrible – and they honestly won’t improve your chances of winning. Click on to the Resolver website and our complaints tool will allow you to make your complaint direct – with no fuss. And most importantly, it’s free.
If you’ve got a problem with a packaged account, check out our guide at www.resolver.co.uk or tell us about your experiences through our Facebook and Twitter pages: