Packaged bank accounts – have you been mis-sold?
(19/06/15) This week we look into what you can do if you’ve been paying for your bank account, and you feel like you shouldn’t have been
Banks have been under a lot of pressure of late to come clean with customers and buck up their customer service practices generally.
The latest area to come under the microscope is packaged bank accounts – and it’s been revealed that many retail banks have been habitually mis-selling them.
Unfortunately, at resolver.co.uk we’re hearing that many banks are pushing back on this issue – that it’s not as easy to get the compensation you’re owed as it is for, say, a PPI claim.
So this week we decided to take a look at just what packaged bank accounts are, and how you can get what you’re owed (and if you’re owed it).
Just what is a packaged bank account?
Packaged accounts are where you pay a set fee – generally on a monthly basis – in return for additional benefits, such as various forms of insurance, or sometimes discounts for certain products or services.
They can be really good – if you are likely to make the best use of the additional benefits – as it can be a great way to get cheap insurance. But often they only double up on products you are already covered for - mobile insurance, travel insurance and the like.
So if you feel like you’ve been pushed into it by the bank’s sales staff, you could well be due quite a bit of compensation, especially if you’ve held the account for some time.
If you do think about keeping your paid-for bank account, you need to carefully consider if you can get the same insurance and other products elsewhere. If it doesn’t add up, then you need to think about reclaiming.
When can you reclaim your money?
If you have a packaged bank account and think you have been mis-sold, you can submit your claim via Resolver. Once your email has been submitted the bank has eight weeks to resolve your issue; Resolver will then remind you to escalate your case.
The bank might not respond directly to your Resolver account, but you can record your phone calls and upload any supporting documents into your Resolver case file.
How much will you get back?
If you have been mis-sold, you will receive back your fees back plus interest. The Financial Ombudsman Services calculates interest at 8% per annum. As this is an income, be aware that you should report any interest to HMRC.
The interest is calculated at 8% per annum, but is not compound interest: that means you will not receive interest on the interest.
How your case will be assessed
When your case is assessed, it will be looked at from the perspective of what is considered to be fair and reasonable. This is the assessment that will be used by the Financial Ombudsman Service if your case is rejected by the bank.
What if your case is rejected?
If your bank rejects your claim, do not worry: after eight weeks Resolver will remind you to escalate your case to the Financial Ombudsman Service.
Role of the Financial Ombudsman Service
The Financial Ombudsman Service is there to independently assess your case: it will be assessed on what is considered fair and reasonable. This service is free of charge.
The ombudsman will look at every case on an individual basis to determine whether the claim is eligible.
How far back can I claim?
There is no time limit on how far back you can claim, but in England and Wales the statute of limitation is six years, while in Scotland it is five years. The further back you go, the harder it is complain.
Claimed on the insurance – can I complain?
If you have made a claim on your insurance policy, you might still be able to make a complaint. If the packaged account did not cover you for the main reason that you bought it, you can still make a claim.