It is estimated that there are approximately 10 million adults in the UK with a packaged bank account at present. A packaged bank account is a type of current account offered by certain UK lenders which offers additional products to the account holder for a fee of anything up to £25 a month. They often offered substantial discounts on these additional products as a way of enticing a customer to sign up for the account. Examples of the products offered are:
- Travel insurance
- Vehicle breakdown cover
- Gadget/mobile phone insurance
- Foreign cash withdrawals with no fees
- Discounted travel money
- Discounts/cashback on household bills paid by direct debit
- Discounts/cashback from partner retailers/merchants/cheap tickets
- Discounts at restaurants
- Access to preferential savings rates and other financial products
- Warranty extensions
- Special offers
Just like PPI, accounts were often mis-sold because the additional products were not suitable for the customer and/or the deal was not properly explained to them by an advisor at the bank. Examples being:
- They were incorrectly told that having one would improve their credit score
- They were wrongly advised they had to take an account (e.g. to get a mortgage)
- The monthly fee was added to the account without the customers consent or knowledge
- The customer was too old to claim on any insurance or had a medical condition which would not have been covered
- The customer attempted to cancel the account at some point but was forced into keeping it by an advisor
- They were misled into taking out the account by an advisor at the bank
- The lender raised the price of an existing account and did not properly inform the customer of the changes
- They were told it was the only way to be approved for an overdraft
- They were never told that they needed to register their phone/car with the 3rd party company to be eligible to make a claim
The amount a customer may be due back will very much depend on the amount of the monthly payments and the length of time they have held the account, however, the average pay-out is currently estimated to be £1300. This is based on the total fees a customer will have paid to the lender since the account had been opened plus a standard flat rate of 8% interest per annum.
Can I make a claim?
Ask yourself the following questions:
- Can you actually make a claim on any insurances included in the package? Even if you can claim on most of them, if you are unable on at least one you may have a claim
- Will you get the use out of each of the benefits included, or do you already have them elsewhere? (e.g. the mobile phone may be already covered in your house insurance)
- Have your circumstances changed since taking out the account? If so you may no longer be able to claim on any insurance policies
- Compare the monthly cost of the account against what it would cost you to buy each item you would to use separately. Is it more expensive?
- Do you need to activate the benefits or register your details before you are covered?
If the answer to any of the questions above is ‘yes’ then you may have a claim. We will fully investigate your accounts and submit the strongest possible argument to your lender(s) This will ensure that you get everything back you may be owed, including the interest. As financial claim specialists we will make this process as simple as possible for you and your dedicated customer advisor will keep you up to date at all times.