When were the Packaged Bank Accounts First Introduced?

In the 1990s Lloyds Bank established a current account called the “Classic” account which charged £8 per month. This account like some others from the other main lenders and account service providers in the UK (such as Barclays, Halifax, HSBC, Nationwide, Santander and Royal Bank of Scotland) all offered similar accounts charging a few pounds per month.  These types of facilities were mainly brought about in order to give the Banks a little bit of “meat for the offering” for a current account facility.

As a benefit to the customers there was normally some sort of inducement attached and clients would have the opportunity to secure cheaper overdrafts or credit interest on their account facilities.  Bearing in mind in the 1990s, the interest rates were higher, the £8 could actually be seen as only a relatively small cost, compared to the benefits of this financial arrangement.  Like most of the other Banks, Lloyds Bank and the other providers of these fee based accounts would promote them to those people who best utilised them.  Those people being, for example, those who were overdrawn or borrowing on a regular basis.

Unfortunately, and as usual, the Banks saw this (following it not being thrown back in their face) as an opportunity to expand the product and develop further accounts which could charge more money each month.  However, where would the Banks find the benefits in order to justify this extra cost?  It was charging £8 per month for various benefits such as interest rate reductions, so how could they justify £10, £15 or £25?  The simple answer is, they did as they always do and packaged a little group of poor products together to justify the fee with a monthly cost.

The products attached in the alleged benefits of the account would include travel insurance, Green Flag cover, mobile phone insurance cover and other forms of protection.  Again, these protections can be useful, if in the right place and at the right time.  However, there were limitations to the types of cover that were offered, such as limitations on the types of insurance cover that people would have.  This could become dangerous, as people would think that they had travel insurance on an annual basis and would not consider taking out any protection thereafter.  However, this type of travel insurance did not cover various extreme sports abroad, so if you went skiing it was useless.  Of course, this would have the knock on effect that if you were in difficulty and did need to rely upon the insurance, it was not worth the paper it was written on!

In the late 1990s/early 2000s the Banks then started to package facilities together and nicely brand them with fancy names such as “Select”, “Platinum”, “Gold”, “Silver” in order to entice clients further.  They even made fancy logos for cheque books and debit cards, as well as making statements which were much more exciting and colourful.  Unfortunately, the Banks are extremely clever at promoting and marketing products and convincing people that they are organisations to be trusted.  We now know however (following the various financial crashes that Banks and those that work within them, not necessarily those people at ground level but certainly high up) have very few morals and certainly have utter contempt for the individuals that bank with them.

There have been many millions of accounts opened and closed since the early 2000s which are Packaged Bank Account facilities.  There are 11 million accounts open and operational through the UK at present.  Taking into account that a considerable number of these have been mis-sold, people have been looking to make considerable claims.  With the refunds that we have obtained for our clients, we are finding that they range from between £1,500 and £3,000.

We work on our clients’ behalf all on a “No Win No Fee” basis.  If you have had a Packaged Bank Account facility that you are unhappy with and you feel that you wish to explore the possibility of claiming a refund, then we can work on this “No Win No Fee” basis so, should we be unsuccessful, there is no fee for you to pay.