Your bank could owe you money if you have a packaged bank account (PBA). If this seems like a surprise, you are not alone.
A growing number of people in the UK are realising that they have been paying for their bank account without seeing any of the touted benefits. And if that is not bad enough, there are others who have no idea that they are paying monthly charges for a PBA.
Irrespective of which of the above groups you belong to, you may be eligible to claim thousands of pounds if you can prove that your PBA was mis-sold.
In this guide you’ll find out:
Why PBA’s can be a bad choice for some people and how to find out if you can claim compensation. You’ll also find out how to start the PBA claims process and where to get extra advice if you need help.
What Is A PBA?
A packaged bank account is a current account that has added features, such as insurance coverage or exclusive access to other financial products and services etc.
Owners of these accounts are usually charged a monthly fee for these extra services.
Is It Bad To Have PBA?
No, PBA accounts can be very useful and a money-saver, as long as the client needs or can access the additional ‘benefits’ being paid for. For instance, they can be an inexpensive way to get cover for multiple insurances. However, this is dependent on the customer being fully aware of the benefits and fees attached to them.
On the other hand, PBAs can be an unwanted financial drain if customers have no use for the extra benefits, do not qualify to access them, or are unaware they have the product in the first place.
Some customers also end up paying double for services they already have elsewhere (such as mobile cover or travel insurance etc). And, in some cases, the monthly cost of the PBA is more expensive than if the additional services were purchased separately from other providers.
How Do I Know If I Am Eligible To File A PBA Claim?
To help you identify if you have been mis-sold a PBA, use the following checklist to see if any of the scenarios listed below applies to you:
- Your bank failed to inform you of a free account option when you opened a new account with them
- Your bank upgraded your free bank account to that of a PBA without your knowledge or permission
- You were made to believe that having a PBA was the only condition for you to access other financial products and services like a credit card, loan, overdraft, or mortgage
- You were told that having a PBA would drastically upgrade your credit score
- You were told that signing up for a PBA would give you access to amazing deals on other financial products or services, but you discovered that as a new customer you could get those same deals at a much cheaper rate
- Your bank deliberately signed you up for a PBA knowing full well that you were ineligible to take advantage of one or a majority of the benefits, e.g. you were too sick or old to use the travel insurance cover
- Your bank neglected to tell you that you did not qualify for one or a majority of the benefits, e.g. you had already exceeded the maximum age limit during signup
If you identify with any of the situations above, then you could be entitled to claim compensation.
What Should I Do To File My Compensation Claim?
To start you along the road to claiming your deserved compensation, here’s what you need to do:
Complain To Your Bank
Your compensation claim should begin with you making an official complaint to the bank where the mis-selling happened.
When you do this, you are giving them the chance to fix the problem before it escalates any further. You will need to write a formal complaint to the complaints department of your bank. Most banks usually have a detailed internal complaints process on their website or office that you can follow.
In your complaint, write down when, where, and how the mis-selling happened. In addition, you should be clear about the reasons you feel the bank mis-sold the PBA to you.
Also, tell the bank the exact way you want them to solve the issue. To give you an idea, you might ask for a refund of all your fees or a closing down of the account.
If you can, include your bank statements as solid proof of the monthly charges you are paying.
Be aware that your formal complaint to the bank should be clear and comprehensive, giving them as much information as possible. Do not skip out on important details or your claim might be thrown out for little evidence.
After you have sent off your complaint, ask your bank to record it as ‘official’. You should also ask for written proof that they have complied with your directive.
Once this is done, your bank will have to respond to you within eight weeks. If this does not happen or you are unhappy with their answer, then the ombudsman should be your next stop.
Contact The Ombudsman
The Financial Ombudsman Service (FOS) is an independent authority that solves issues between financial firms and individuals.
Once a case gets to the ombudsman, it will look at evidence from both parties to arrive at a decision. This decision will also include a suitable form of redress to appease the winning party.
If you have decided on using the ombudsman, you will first have to complete the FOS complaints form. All the paperwork collected during your correspondence with the bank and all evidence of the mis-selling should also be attached to the form.
Once the FOS receives your complaint, the ombudsman will send you a letter to inform you they will begin investigating your case.
If the ombudsman reaches a decision that you are happy with, then your bank has to immediately comply with it. However, if you are unhappy with the ombudsman’s decision, you can request for a formal decision from one of the ombudsman’s official adjudicators.
Since your request will need painstaking investigation, be prepared to wait some months for a decision. If the result of this process results in a decision you still feel unhappy with, you have one final option.
Use The Courts
The courts will give you a chance to reclaim your fees, but it entirely depends on you winning your case. Therefore, before embarking on this particular journey, we suggest that you consult a lawyer experienced in similar cases for legal advice.
After reviewing your information, an experienced lawyer will be able to determine your chances in court. Doing this could save you a lot of time, effort, money and heartache as court cases can be costly and labour-intensive.
PBA Claims: Q&As
1) Can I Claim For My Packaged Bank Account?
Yes, you can, providing you meet the criteria.
There are a number of different reasons that qualify, such as your bank having failed to ensure the packaged bank account was suitable for your individual needs and circumstances, or perhaps you were pressured into signing up.
Thousands of customers have been mis-sold these types of accounts and have successfully claimed against their bank. Check out our free guides for more information and let Claims Compass help you get the compensation you deserve.
2) Can I Claim My Monthly Bank Charges Back?
Yes you can, if you have a valid claim for a mis-sold packaged bank account. Many customers were incorrectly advised or pressured into signing up for a bank account that was unsuitable, whereby their bank was charging them a monthly fee for additional ‘benefits’ they didn’t need or couldn’t access.
These accounts can represent good value if a customer can make use of the ‘extras’, but many have found them to be poor value or yet another mis-sold financial product. Claims Compass have guides available and access to advisors who can help you claim back the monthly charges, plus interest, where valid.
3) Is Lloyds Bank Refunding Monthly Fees?
Yes it is, for those customers who have been mis-sold a packaged bank account (PBA) and have sought compensation.
All the main high street banks have had to put aside millions of pounds to reimburse customers who were given incorrect or incomplete advice on whether a packaged bank account was right for them. Many people have been paying monthly charges for additional ‘benefits’ they didn’t need, or insurances they couldn’t access.
Lloyds is amongst several well-known banks refunding charges and interest on mis-sold PBA accounts. If you think this may apply to you, see our online guides for the criteria and let Claims Compass help to determine if you have a valid claim.
4) How Much Should I Expect As Compensation?
Typically you can expect to receive a complete refund of all the monthly charges you paid for the mis-sold PBA.
Also, you would receive an interest payment of 8%, based on the assumption that you may have earned money on that sum if the bank had not taken it from you.
This 8% interest is calculated at a flat rate per annum rather than a compound rate. In simpler terms, it means you won’t receive payment for interest on interest.
5) Is There A Limit To How Far Back I Can File A Claim?
The law has not placed a specific time limit on this, but it can be hard to prove a mis-selling that happened a long time ago. Typically, mis-sold PBA claims that happened in the last six years are the easiest to prove and solve.
6) I Signed Up For The PBA Online – Will It Affect My Claim?
Absolutely not! There is no difference between signing up for a PBA account in a branch or online.
During the investigation of your claim, you will still be asked the same questions. The information you were provided with at the time you signed up for the account will be scrutinised, to discern where the mis-selling happened.
Also, there will be an assessment of how clear the information appeared on the screen.
Not Sure How To Start Your PBA Claim?
When used as directed by the Financial Conduct Authority, PBAs can be immensely beneficial to the right customers.
But since many high street banks have been criticised for their inappropriate or pressure selling of these accounts to clients who could not make use of the benefits, they are rightly being held accountable for their product mis-selling and are refunding customers in their thousands.
If you’re unsure where to start after reading this guide why not use our online form to schedule a free, no obligation call with an experienced claims advisor? They will be able to help and advise you, and offer the best next course of action for your individual circumstances.