Packaged Bank Account Mis-Selling

What Is a Packaged Bank Account?

Packaged bank accounts are current accounts that charge a monthly fee — typically between £10 and £25 per month — in exchange for a bundle of benefits such as travel insurance, mobile phone insurance, breakdown cover, and preferential rates. Millions were sold by UK banks including Lloyds, Halifax, Barclays, HSBC, NatWest and others.

The Challenge: How Accounts Were Mis-Sold

A packaged bank account was mis-sold if:

• You were not told you were signing up for a fee-paying account
• The account was not suitable for you — for example, you were too old to claim on the travel insurance, or had a pre-existing medical condition that excluded you
• The benefits were duplicated — you already had equivalent cover elsewhere
• You were pressured or misled into upgrading from a free account
• The account was opened without your knowledge or consent

The Process: How the Claims Were Brought

Scottish Claims Helpline identified clients across Scotland who had been paying for packaged bank accounts they did not need, were not suitable for, or had not properly agreed to. We assessed eligibility and referred viable claims to The Money Solicitor, who handled the legal process of recovering fees from the banks.

Total recoveries for our referred clients exceeded £1.5 million.

The Outcome

Claims were settled through negotiation with the relevant banks. Clients recovered the monthly fees they had paid — in some cases over many years — plus interest. For clients who had held packaged accounts for a decade or more, individual recoveries ran to several thousand pounds.

Timeline

• March 2013
  The Financial Conduct Authority introduces rules requiring banks to check that packaged account customers are eligible for the insurance benefits they are paying for, and to send annual eligibility statements.
• 2014–2016
  Complaints about packaged bank accounts surge. In 2015–16 they become the second most complained-about financial product at the Financial Ombudsman Service, behind only PPI.
• Claims referred
  Scottish Claims Helpline assesses clients across Scotland who had been paying monthly fees for accounts that were unsuitable, duplicated existing cover, or had never been properly agreed to, and refers viable claims to The Money Solicitor.
• Settlements
  Claims are settled by negotiation with the banks. Clients recover the fees paid, in some cases over a decade or more, plus interest. Total recoveries for referred clients exceed £1.5 million.