Packaged Bank Account charges are basically fees that are applied to a Banks’ current accounts, charged on a monthly basis. The Bank charges this monthly fee and provides the client with a “package of benefits” which can include travel insurance, roadside assistance and also cheap rate entrance to various attractions throughout the country.
Examples of items that maybe included in a typical PBA
- Mobile Phone Insurance
- Travel Insurance
- Breakdown Cover
- Cinema Tickets
- Attraction or Event Tickets
A majority of the bank accounts have varying different packages, and some include these styles of benefits, but others, for instance, just have benefits which secure a cheaper rate on a personal loan or credit card.
Why Were Packaged Bank Accounts Mis-sold
The main reason why Packaged Bank Account charges are being looked at in depth by the Financial Conduct Authority (FCA) (and which we have seen a growing number of claims in relation to the mis-selling of the Packaged Bank Account charges) is that there are a lot of grey areas in relation to how the Banks promoted these particular accounts. The FCA have suggested that, rather than actually promote and offer the account to individuals who would benefit from the various benefits of the facilities, they have been sold to anyone who has an account with the Bank. This is borne out of the fact that at present there are 11 million Packaged Bank Account facilities throughout the Country and, over recent years, this number has certainly doubled when bearing in mind all the accounts that have been closed.
The mis-selling takes place in relation to bank account charges when the Bank sells and promotes the product in such a way that it does not comply with the rules and regulations laid down by the financial institutions regulator (in this case the FCA). The benefits of the particular Packaged Bank Account have not been strong enough to justify the way that the Banks have sold the particular product and the way that the Banks have promoted the facility, by not offering a free account. This meant that individuals were not given a choice (which they should have had) over whether to take the facility or not.
Packaged Bank Account
A packaged bank account is a current account issued by a bank that comes packaged with other goods and services. A packaged bank accounts usually includes travel insurance, breakdown cover and other ‘perks’ for a monthly account fee.
How Much Does a Packaged Bank Account Cost Per Month?
The Packaged Bank Account facility itself charges a monthly fee which can range from anywhere between £10 and £30 per month. As stated above, it can reflect a variety of so-called benefits ranging from cheaper “away days” through to mobile phone cover (of course, this cover is in place only as long as you register the phone with the prescribed data centre contained in the small print of the facility) or cheaper rate loans are offered to clients who have accounts where for which they pay each month. However, the accounts are normally only provided to people with a certain degree of income. These cheaper rate facilities are also available to anybody, providing they have this income. Therefore, again the facility itself is unnecessary.
What is a Packaged Bank Account (PBA)?
How can a (PBA) be mis-sold?
What is a Packaged Bank Account (PBA)?
What is a Packaged Bank Account?
A Packaged Bank Account (PBA) is a bank account where you pay a monthly fee to the bank for it to provide you with additional benefits. These benefits vary and can include, amongst others: –
- Holiday travel Insurance;
- Gadgets and technical cover for electrical items in your home;
- Car breakdown cover;
- Mobile Phone Insurance.
The above list is not exhaustive and different banks offer different packages for their customers.
How can a Packaged Bank Account or (PBA) be mis-sold?
A Packaged Bank Account can be mis-sold if the account products being offered were not needed by
For example, if the customer already had travel insurance in place or mobile phone insurance, there
would be no need for them to take out separate cover through the bank account and a free normal
bank account would have been sufficient for that customer.
A mis-sale can take place where: –
- You are signed up to a packaged bank account by the bank without being told, or advised that
they you could have had a free standard bank account instead.
- If the bank adviser never checked to see if the benefits were needed by you or if you already had
similar products that covered you in place elsewhere.
- If you were not told by the bank that you would not be entitled to make a claim for a particular
benefit or benefits on the account, for example, existing medical condition on travel insurance,
or does not cover adventurous sporting holidays.
- If you were not informed that there is a maximum age limit to claim on certain benefits of the
packaged bank account.
- If you were told that having a packaged bank account would give you a better credit score.
- If you were told that the benefits of the packaged bank account were the best and could not be
beaten elsewhere but then you discover that you could get them cheaper elsewhere.
The above list is not exhaustive but an indication of the likely mis-sales that can occur.
It is therefore important to check whether your packaged bank account is sufficient for you and your
needs and to always check the fine print.
The bank has a clear duty to its customers to provide fair, concise, clear and unambiguous
information to its customers to enable them to make informed decisions on whether the packaged
bank account is needed, or not.
Packaged Bank Accounts are now becoming one of the top complaints by customers against their
My bank wouldn’t mis-sell me a Packaged Bank Account? Would they?
Unfortunately, along with many other banks and lending institutions, your bank could well have mis-sold you a packaged bank account. If you consider that: –
- They did not give you an option to take a free bank account with them;
- Did not advise you fully about the benefits and exclusions to the benefits;
- Did not assess with you whether you needed the benefits being offered, for example, you already have those benefits elsewhere;
- Did not properly assess whether you could afford the monthly account fees;
- They told you that you could not get the packaged bank account benefits cheaper elsewhere or give you the option to look elsewhere;
Then the packaged bank account was likely mis-sold to you.
Can I receive compensation for a mis-sold Packaged Bank Account?
If you think you have been mis-sold a packaged bank account, you should firstly speak to your bank
to ask that they look into the complaint and have a chance to make it right with you first. You should
provide as much information as possible to the bank to assist them and you with your complaint.
If the bank will not resolve the problem or does not consider you have been mis-sold your packaged
bank account, then you have a right to refer your complaint to the Financial Ombudsman Service.
This is a free service and you can find their details on their website, together with other helpful
advice and information.
Many thousands of packaged bank accounts are thought to have been mis-sold by the various High
Alternatively, if you do not feel confident doing this yourself, we would be delighted to assist you on
our No Win, No Fee basis.
We charge 20% plus VAT only where we are successful in obtaining compensation on your behalf.
What compensation would I get if the Packaged Bank Account was mis-sold?
Compensation will include: –
– Full or part of the fees you have paid to date to your bank for the Packaged Bank Account;
– Interest on top of the compensated refunded fees, currently at a rate of 8%.
Mis-sold Packaged Accounts
Lloyds Bank started charging facilities in the 1990s by opening up their Classic account at a fee of £8 per month which offered a variety of benefits, but mainly these were account based, such as credit interest and reduced interest on overdraft facilities. The client therefore had some degree of benefit that could be monitored and utilised. Also, clients had the opportunity to have a “fee-free” banking account and were not penalised in doing so. However, as is normal, the Banks became greedy and used the Packaged Bank Account facilities as an excuse to drive home their absolute desire to make sure that fee-free accounts were (not necessarily a thing of the past, as they are required by Law to offer them) shuffled to the wayside, converting many people to the fee-based account in order to generate considerable revenues. I will leave everyone to get their calculators out to work out how much on average, say £15 per month is times by 11 million. Therefore, you can work out exactly how much the Banks are earning, just on this particular type of account.
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The customer is not required to use the services of a firm which carries out regulated claims management activity to pursue their claim. Should someone wish to handle the complaint themselves, they will first need to lodge the complaint with the financial institution first before escalating to the Financial Ombudsman. It is possible for the customer to present the claim themselves for free, either to the person against whom they wish to complain or to the Financial Ombudsman https://www.financial-
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Frequently Asked Questions
What is a Packaged Bank Account?
A packaged bank account is a current account that comes with additional goods and services such as travel insurance, breakdown cover and mobile phone inusrance. Usually this type of account will have a monthly fee.
Can I Reclaim Packaged Bank Account Fees?
If you are paying a monthly fee for your bank account and the limitations and options of the account where not explained clearly there is a possibility that the account may have been mis-sold to you. If this is the case you will be able to make a claim.
Why do Banks Charge Monthly fees?
Many banks will charge a monthly packaged bank account fee to cover costs for maintaining the account and the perks and services that go with the account. Most of the service included in the packaged account deal, will cost the bank money, this is the banks way of covering these costs.
Do you Have to Pay a Monthly Fee for a Bank Account?
The honest answer is that it is extremely difficult to work out whether your Packaged Bank Account (PBA) was mis-sold. The general rule of thumb is that if it did not feel right when you took the account, and on reflection you were not happy with the way that the product was promoted to you, namely you were in some way, shape or form coerced into taking the facility and you were not offered any other type of account facility, then there is a good chance that the facility was mis-sold.
Why were Packaged Bank Accounts Mis-sold?
The mis-selling takes place in relation to bank account charges when the Bank sells and promotes the product in such a way that it does not comply with the rules and regulations laid down by the financial institutions regulator (in this case the FCA
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