Market data suggests that one in five of us holding a packaged bank account have been mis-sold the account. But what is a packaged bank account and do you have one?
A packaged bank account is where you pay a monthly fee for a number of products or services that bundled in with the bank account. Typically, these can be £5 to £35 a month and a typical package could include a flexible overdraft, travel insurance, mobile phone insurance or subscription to a film rental service.
The most common contents of a packaged bank account are insurance products. A survey undertaken by YouGov last year found that 20 per cent of packaged bank accountants were mis-sold them. That’s a scary number, but at least 80 per cent of those with these accounts have something that is suitable for them and are receiving great value.
There are 62 million current accounts in the UK. Of those, 8.7 million are packaged accounts. And if a fifth of those were mis-sold, that means there are 1.7 million customers who have been mis-sold a packaged bank account. If consumers have paid for these for two years, then that’s a potential £520 million that account holders have been overcharged.
The Financial Ombudsman Service now receives around 4,000 cases a year and this number is continuing to rise.
Most packaged accounts offer good value and provide a good selection of services but it is important that you make the most of the benefits. For example if it includes travel insurance, then don’t go and buy travel insurance separately. Work out what you get with your bundle. How many of the bundled products would you normally want?
How would the costs compare with the packaged account?
If it is cheaper to buy separately, you should cancel your packaged account.
You need to contact your bank or the bank you used to be with to lodge a formal complaint. Explain why you feel that you are entitled to a refund.
Provide any evidence that you may have, although you are probably going to have a limited about of written information supporting your claim as most information will relate to the person who sold you the package.