Packaged Bank Accounts. Were You Mis-sold?

Packaged Bank Accounts

Packaged bank accounts, otherwise known as PBAs, are bank accounts that provide extra perks that you don’t get with a regular bank account. In exchange for those perks, you pay a monthly fee.

So far so good. It’s only normal to pay for perks and services. The problem, however, is that just like the PPI scandal that has rocked the financial world with its prolific mis-selling, packaged bank accounts are now in a similar boat.

As we’ve seen with PPI, thousands of people were often ‘sold’ packaged bank accounts without their knowledge or when the alleged perks were actually useless to them.

This article will guide you on finding out if you have a PBA and ascertaining whether it was mis-sold or not. If it was mis-sold, you’ll learn about what you can do to reclaim your money.

Is Your Packaged Bank Account Right For You?

Just because thousands of packaged bank accounts were mis-sold, it doesn’t make the product itself bad. Just as payment protection insurance is a good thing to have — in the right circumstances — so too are PBAs.

If you remember being offered the packaged bank account and made a rational decision to take it, then it’s very unlikely you were mis-sold. As was just mentioned, in the right circumstances, packaged bank accounts offer some great perks, such as various types of insurance.

It becomes a problem when you either didn’t make a conscious, rational decision to take the account and/or when the perks associated with it were useless to you.

So How Do I Know If My PBA Is Suitable For Me?

The simple way to do that is to look at the perks you are currently receiving with the account. Then decide if:

A) They are any good to you, and
B) They are financially beneficial to you

A List of Perks Often Associated With PBAs

All packaged bank accounts offer different kinds of perks, so we can’t say what you are getting with yours. We can tell you some of the most common ones, which are listed below:

  • Overdrafts with reduced fees
  • Extended Warranties
  • Mobile Phone Insurance
  • Gadget Insurance
  • Travel Insurance
  • Fraud Protection
  • Breakdown Cover for your car
  • Loyalty Rewards
  • These are all potentially great perks to have, but only if they are suitable for you.

Check your packaged bank account agreement and see what perks are attached to your account. Then decide if they are of any use to you. There are two main things to consider when doing this:

  1. That the actual perk itself is useful to you (for example, an overdraft with reduced fees can be great if you go overdrawn, but not if you’re always in credit)
  2. That the perk would not have been cheaper elsewhere. It’s all very well having breakdown cover for your car, unless it would have been cheaper to get the cover elsewhere.

I Have a Packaged Bank Account. Was It Mis-sold?

If you have a PBA that has insurance attached, it is your bank’s duty to ensure that the insurance is suitable for you. All too often, the salesperson failed to do this, which means many people were lumbered with insurance that was useless to them.

The key point is this: Banks and their sales staff have a duty to ensure that the products they sell and any perks associated with those products are right for you.

All too often they failed to do this. It’s what you were told — or not told — when you opened or upgraded your account that is important.

The following list highlights the ways in which packaged banks accounts were most commonly mis-sold. Have a read through and see if any of them apply to you.

8 Ways In Which PBAs Were Commonly Mis-sold

Just like mis-sold PPI, packaged bank accounts were mis-sold in a number of different ways. You only need to recognise one of the following as being applicable to you to be able to make a claim.

1. You weren’t told you needed to register your device or car

You may have been sold on the idea of a PBA fairly and made a rational decision to take it. So far so good. The problem here, however, is that many people weren’t told that in order to be covered by certain insurances, they had to contact the insurance company themselves to register their device / car, etc.

You may have willingly taken the account and thought you were covered, only to discover when you car or phone was stolen that you weren’t because you didn’t register it.

2. Your age made you ineligible to use the insurance.

Many insurance policies have age restrictions. It’s quite common for travel insurance, for example, to have restrictions on the upper age limit.

You may have taken the PBA because you found the travel insurance an attractive proposition, only to find that you weren’t actually covered because you were older than the upper age limit allowed on the policy.

3. “You have to have it…”

Many people were told that a packaged bank account was compulsory in order to secure the loan, mortgage or overdraft they were applying for.

This is a blatant lie.

Your bank can’t refuse your request for an overdraft or any other finance based purely on whether you have a PBA or not. If you were told a lie similar to this, it’s almost certain that you were mis-sold and, therefore, can claim.

4. You were misled into taking the account in some way

If you were told you were eligible for one of the perks when you weren’t or if the salesperson was pushy or if the full cost was withheld from you, you were most likely mis-sold.

Basically, if the full details weren’t openly revealed to you and, because of that, you were misled, your PBA was probably mis-sold.

5. The fee was added without your knowledge or agreement

This was a common tactic in the mis-selling of PPI. If you discovered any fees on your bank statement, which were related to the account itself, you are in a position to make a claim.

Your bank has a duty to be fully transparent in its dealing with you. Adding on fees on the sly is anything but transparent.

6. They increased the cost without telling you

Similar to the above but different in the sense that you may have known you were paying a monthly fee for your packaged bank account. The difference here being that banks often hiked the price without fair warning (or any warning, for that matter).

7. “It will improve your credit score.”

Were you told that having a packaged bank account would improve your credit score, and that’s why you took it out?

Having a PBA has no affect on your credit score at all. If you were told this and took out your PBA on the back of that advice, you’ve got a claim.

8. You weren’t allowed to cancel your agreement

Some people knew they had a PBA and decided after a period of time that they no longer wanted it. When they tried to cancel the account, however, they were often told they couldn’t.

Packaged bank accounts are not compulsory in any situation and if you were coerced into keeping yours, you can claim.

Do I Have a Packaged Bank Account?

If you’re not sure whether your bank account is of the regular or packaged variety, the easiest way to check is by looking at your statements. If you see there is a monthly fee on your statement, then it is a packaged bank account.

If you’re not sure and would like to put your mind at rest, simply contact your bank and ask them.

I Have a PBA and Believe It Was Mis-Sold. Can I Claim?

If one or more of the ‘8 Ways In Which PBAs Were Commonly Mis-sold’ applies to you, then you are eligible to make a claim.

What it essentially comes down to is whether you knowingly took the account or not. If not, then you were most likely mis-sold.

If you knowingly took the account, but were lied to in some way about the perks or your eligibility, then that is also grounds to make a claim. As you might imagine, some banks aren’t rolling over and handing over the money easily.

You may have a bit of a fight on your hands, but don’t let that put you off. And if it does put you off, remember you can get assistance from us to make your PBA claim.

Will I Be Penalised If I Claim For Mis-sold PBA?

No, your bank cannot penalise you for claiming back money that they took by deception. If you claim for a mis-sold PBA, the relationship you have with your bank will remain unaffected.

Keep in mind that if you do claim and you are successful, i.e. you wina refund, your bank account will automatically be downgraded to a regular bank account. If that happens, then any benefits you’re currently receiving will also be cancelled.

How Much Can I Get Back?

This also shares similarities to the PPI scandal. We can’t say how much you’ll get back because it depends on how much you’ve been paying and for how long. But if you’ve had the account for three years and have been paying £20 per month for it, then you should receive a £720 refund (36 months x £20 = £720).

Summary on PBA Claims

Packaged bank accounts can be great to have — in the right circumstances. If you were sold one but were ineligible for any of the perks attached to it, then you can most likely reclaim your money.

Similarly, if you were lied to or coerced into taking it out and keeping it, you can also make a claim there too.

PBAs, just like PPI, can feel like a minefield for some people. If you’d like further advice or would like assistance in claiming back your money, give us a call to have a chat about doing so.

It’s free to call and the lines are open from 10am to 7pm Monday to Thursday and from 9.30am to 6.30pm on Fridays. The free phone number is: 0800 031 6078.

If you would prefer us to call you, just pop your details into the short form and we’ll call you back.