As you may have seen in the media, many of our high street banks are currently dealing with yet another financial mis-selling scandal, namely mis-sold packaged bank accounts (PBAs).
New rules were implemented by the Financial Conduct Authority (FCA) back in 2013 to provide more protection for the customers being sold this type of bank account, as complaints to the Financial Ombudsman Service had been rising.
A further review was carried out some time later and still found that many financial institutions were falling foul of those rules, including the popular and well-known bank NatWest.
Millions of customers across the UK hold a packaged bank account and could be entitled to claim compensation if their PBA was mis-sold.
In this guide, we will explain what a packaged bank account is, how they differ from a standard current account, how to tell if you were mis-sold your PBA, and the steps to take if you think you are affected.
What Is A Packaged Bank Account?
A packaged bank account is a current account that includes additional benefits, such as mobile phone insurance, travel insurance, breakdown cover etc.
It may also include preferential access to things like airport lounges or discounts on services or products and customers typically pay a monthly fee to have this type of account.
A PBA differs from a standard current bank account by offering these additional benefits and charging a fee for them. These packaged accounts often have names such as Silver, Gold or Platinum accounts. Whereas a standard basic current account, certainly for most domestic customers in the UK, is generally provided free of charge by their bank.
Have All Packaged Bank Accounts Been Mis-sold?
No, there are many customers for whom packaged bank accounts are considered beneficial for their personal circumstances. They may find a PBA convenient, to have such insurances all in one place, and feel that the monthly fee they pay represents good value for money.
On the other hand, thousands of disgruntled consumers have discovered that they are paying for insurances packaged in their bank account that they simply will not use or cannot access when a claim arises.
For example, an account holder may in fact be too old or have medical conditions that renders the included travel insurance useless and totally void. In this scenario, it could cause severe financial repercussions if they relied on their PBA insurance and then discover they are unable to make a claim when a problem occurs.
How Can I Tell If My NatWest Bank Account Was Mis-sold?
There are several ways in which a packaged bank account may have been mis-sold. It is a sad fact of life that there are unscrupulous and unethical salespeople working in all industries, and unfortunately the banking sector is no exception.
A review by the FCA found that some operating practices and bank sales tactics fell under this category and meant that thousands of PBA accounts were systematically sold to customers for whom they were wholly unsuitable.
Examples of some scenarios that may fall under the classification of financial mis-selling include :
- Not being told what the monthly or annual fee was to open and retain the packaged bank account
- Not having been made aware of all the key benefits and exclusions of the PBA when you first opened the account
- Being moved or ‘upgraded’ from an existing free current account to a fee based packaged bank account without knowing or gaining your permission
- Being pressured into starting a PBA without the salesperson advising you there was a free current account option available instead
- The bank neglecting to carry out an initial eligibility check on the account holders, to establish the relevance and access to the additional benefits and services on offer
- Failing to reasonably check and advise you of the benefits you could not claim, or worse still knowing you would not be able to claim (i.e. because you were too old to be eligible or had excluded medical conditions etc)
- Telling a customer that they had to have a PBA as the only condition to be eligible for a loan, credit card, overdraft or mortgage with that bank
- Being given false information or exaggerating the overall benefits, such as saying a PBA would hugely increase your financial credit score
- Suggesting you would only be able to access amazing deals if you had a PBA and then later finding out those deals were available to all customers and, in some cases, at a cheaper price
- Your bank failing to carry out an annual eligibility review or send you an annual eligibility statement for your packaged bank account, to clarify your current circumstances and establish whether the account is still right for you
If any of the above sounds familiar to you, you may be eligible to claim compensation for a mis-sold packaged bank account and receive a refund of all the fees you paid, plus interest.
Can I Make A Claim On My PBA Insurance If I Have Cover Elsewhere?
No, it is important to remember you can only claim on one insurance policy when making a claim for a specific loss, so could be doubling up on insurance costs unnecessarily if you are paying two providers.
When opening or continuing with a packaged bank account, make sure you are not paying twice for insurance cover for the same item/situation.
For example, you may already have replacement cover for your mobile phone being paid for (or included) in your phone contract. Or perhaps you already purchased annual travel insurance from another provider and so do not need travel cover in your bank account.
Even if you are basically happy with the fees you are paying for your packaged bank account, it is prudent to check if the annual costs of the PBA represent good value compared to buying those insurances or services elsewhere.
So, if you are paying £15 per month for your PBA, that is £180 per year. Therefore, double check if that total cost is higher or lower than you would pay elsewhere for the same benefits.
Of course, it’s not always just about the costs and as stated earlier, many consumers find PBAs both beneficial and convenient. It all depends on individual circumstances, so there is not a one-size-fits-all approach.
The key message here is to establish if the packaged bank account you have is right for you and if you have been a victim of mis-selling.
Is There A Time Limit For Making A Claim?
It is possible to make a claim for as many years as you have had the packaged bank account, although it can sometimes be harder to claim if you were sold the account over six years ago.
The banks may initially reject claims made against accounts older than 6 years, but don’t let that put you off. If you can prove you were mis-sold the account and have a strong case, customers have claimed for fee refunds going back a lot longer than that.
A successful claim pay-out of this type is often in the hundreds and can be several thousands if you paid a high monthly fee over many years.
What Steps Should I Take To Claim?
Claims Compass can help with your packaged bank account claim and arrange for an experienced advisor to verify if you have a valid claim and, if so, assist in getting the compensation you deserve.
However, there are several steps that you should follow if you prefer or wish to start this process yourself:
1) Complain Directly To Your Bank
If you feel you have been mis-sold your packaged bank account, write to your bank and state in clear terms why you believe this to be the case.
Most banks have an internal complaints procedure and so you should explain exactly what happened when you opened the account and under what basis the mis-selling occurred.
Also, tell them what you want them to do to resolve the issue. This may involve asking them to close your existing fee-based account or change it to a standard free account and refund the fees you have paid.
Your bank is generally allowed 8 weeks to investigate and respond to your complaint. If they do not respond within this timeframe, or you are unhappy with their answer, then your next step could be to contact the Ombudsman (although they do apply a strict time-limit to their cases).
2) Make Contact With The Ombudsman
The Financial Ombudsman Service (FOS) is an organisation set up to mediate and resolve financial issues between customers and financial providers such as banks.
Once a case is accepted by the FOS, they will consider the evidence from both parties and reach a decision on how to settle the matter.
To begin this process, you will need to complete the FOS Complaints Form and attach copies of all the correspondence relating to your claim, including those between you and your bank.
It can take some months for the Ombudsman to reach a decision, so you need to be patient. If their investigation results in your favour, then the bank must comply with their decision.
However, if you are unhappy with their judgement, you may decide to refer the case to the Ombudsman’s official adjudicators.
After this, if you are still unhappy with their decision, you are left with one final option, take the matter to Court.
3) Go To Court
The courts will give you the chance to reclaim your PBA fees, but only if you win the case, so it is important to weigh up the potential gain against any possible losses.
Before choosing this final option, we suggest you speak with an experienced solicitor in this field of financial law, so they can correctly advise you on the chances of presenting a successful case.
Questions And Answers:
1) Are NatWest Refunding Bank Charges?
Yes, they are. Many high street banks are having to accept liability in financial mis-selling claims relating to packaged bank accounts and, as such, are refunding millions of pounds in mis-sold account fees.
If you have been a victim of this, Claims Compass can help you get the compensation you deserve.
2) Why Are NatWest Refunding Bank Charges?
NatWest, along with many other high street banks, have been found to have mis-sold packaged bank accounts to thousands of customers for whom they were unsuitable, or failed to follow the rules in place to ensure consumers were fully informed of the pros and cons of such an account.
3) How Long Does A NatWest Refund Take?
Once an official complaint has been logged, the banks are required to respond within 8 weeks.
This does not automatically mean that a refund will be paid in this timescale, but it does mean they need to be in dialogue with a customer regarding their complaint within this period.
Having a strong case for a mis-sold financial product is key to getting a refund and Claims Compass can help verify this for you.
4) Can I Claim Back My Bank Account Monthly Fee?
If you have a valid case for a mis-sold packaged bank account (PBA), then yes, you will be entitled to claim back your fees from your bank. In most cases, you should get a full refund of fees paid plus interest.
5) Are NatWest Refunding Platinum Account Customers?
Along with other well-known high street banks, NatWest have been implicated in the financial mis-selling of some packaged bank accounts (PBA), including their Reward Silver and Reward Platinum accounts.
The monthly fees pay for additional benefits and services, but many customers have now realised that the accounts are in fact unsuitable for their circumstances or were falsely recommended and so have successfully received a refund of all fees paid plus interest, in valid compensation claims.
NatWest Packaged Bank Account Refunds: Next Steps
If, after reading this article, you feel you have been mis-sold a packaged bank account, we can help. To arrange a free, no-obligation call with an experienced advisor, please complete the contact form.