Tuesday, 26 August 2014


Do you pay for your current account? More than 10 million of us do. But it may have been mis-sold, especially if it was sold to you before April 2013. If it was then you may be able to get compensation.

A packaged current account is one which comes bundled with insurance products, such as mobile phone cover or a car breakdown service, and other benefits such as access to airport lounges. Some give better deals on overdrafts or loans.

In 2011 the regulator investigated these accounts because of concerns about the cost, the claims that were made about their value, and the suitability of the insurance products included. As a result it introduced strict new rules from 31 March 2013 to improve the way they were sold. Since those rules began several banks have stopped selling packaged accounts at all and others have changed their offers.

If you have a packaged account – especially it was sold to you before that date, as millions were – you may find that the account was mis-sold and you can claim compensation.

The banks are resisting such claims. In 2013/14 complaints about packaged accounts to the Financial Ombudsman Service more than trebled to 5667. Every one of these cases had already been rejected by the bank concerned. The Ombudsman upheld more than three out of four of these complaints reporting that many people were sold deals that did not meet their needs or with inadequate information.

You may be one.

Check your bank account and whether you do pay for it – it will be shown on your monthly statement. The Ombudsman found some people were not even aware they had a packaged account. If that is you then it was probably mis-sold

Then look back to when it was sold to you.
  • Were you told that taking the packaged account was a condition of getting another bank product or service such as a loan or mortgage? That may have been a mis-sale.
  • Were you sold the packaged account without being told that a free alternative was available? That may have been a mis-sale.
  • Did the monthly fee cause you financial hardship? That may have been a mis-sale.
  • The most common problems are with the insurance policies bundled with the account.
  • Were the separate insurance policies explained to you? If not that may have been a mis-sale.
  • Were the policies suitable? For example:
  • Was travel insurance included without asking about pre-existing medical conditions or age which may mean you could not claim on it anyway. That may have been a mis-sale.
  • If car breakdown insurance was included did you have a car? If not that may have been a mis-sale. If you did was it already covered by you? That may have been a mis-sale.
  • If mobile phone insurance was covered was your phone already covered by your home insurance policy? If so, that may have been a mis-sale.
Those are just examples. If the packaged account was sold to you without full disclosure and information about all the separate products you were paying for or without your full understanding of the products and the conditions attached to them then you may have a valid complaint for mis-selling.

Write to the bank setting out your complaint. Ask for the account to be cancelled and for a full refund of all the fees paid to date. Make it clear that if you do not get compensation you will be taking the matter to the Financial Ombudsman. If you do not get a satisfactory result then go to the Ombudsman. You can talk to the Ombudsman service on can be reached on 0300 123 9 123 or 0800 023 4 567.

This article was first published on the saga.co.uk/money website