We have been listening to our customers’ comments about their packaged bank accounts. Some interesting trends and patterns were revealed. The most obvious failure of the banks was in neglecting to make their customers aware that the packaged bank account they were being sold was optional. The essential point is – it was absolutely vital that they tell their customers that they could choose to have a FREE account.
Particular groups of customers were very vulnerable – people who have moved to the UK and then visited a high street bank to set up an account. Globally, banking can be conducted in very different ways, and customers have reported that in other countries it was normal to pay for a bank account. It therefore came as no surprise to them that a monthly fee was charged for their British account. However, as we have seen, they were not obliged to open a fee-paying account in the UK. Given the customers’ past experiences, the fee paying account proposition rang no alarm bells whatsoever. But, and we have to say it again, the bank had a duty of care to offer the alternative – a free account – in order that an informed decision could be made about the purchase. It stands to reason – just because a customer had to pay for a bank account abroad does not mean that he or she would want to pay in the UK if they were given the alternative free option. In reality, such people were an easy sales target.
The banks might now argue that the customer was presented with a brochure explaining the account and the finer details. They might also argue that the customer signed the application. But this still does not provide sufficient evidence that the customer who moved to the UK was made aware of the free account option. The bank would obviously further defend its sales practices by claiming that it would have been standard procedure to offer verbal confirmation, but such claims offer no evidence that staff stuck to those procedures. In fact, when the circumstances of the sale are investigated a wildly different picture is often evident. To give one example, an individual did not at the time have a car due to the potential expense, and did not even have a UK driving license. Under such circumstances it is difficult for the bank to argue that a customer would intentionally pay for insurance when it was obviously not required. The rational decision for the customer would have been to open a free account. The bank should have made sufficient enquiries for that to be considered, and this patent neglect is something the bank would find very difficult to defend. Given this or similar circumstances, the customer has every right to claim back bank charges.
Mis-sold packaged accounts – Were you up-graded without your knowledge?
The extraordinary thing about packaged accounts is that many people do not even know they have the account. The first place to look for evidence that you do indeed have such an account, is your bank statements because they should itemise this fee as a monthly payment. PBA’s are subtlety and cleverly disguised with the use of attractive-sounding names, so look for tell-tale words such as Gold, Premium, Upgraded, Reward or Advanced. Like thousands of other packaged bank account holders, you might find you’ve been paying for bolted-on ‘benefits’ you do not need, or even could not use. The main clue might be, that alongside the account name your account shows a monthly fee that is being deducted from your account each month for this up-grade (the expression ‘up-grade’ should be viewed with suitable distrust).
Once you have established that you have a packaged bank account you should consider whether the bank up-graded your account without consent. And here’s a point to bear in mind – if you have had to take the time to look at your bank statement to see if you are paying a monthly premium, the chances are that you do not recall taking out this packaged account in the first place. If you did not ask for your bank account to be changed, or consent when or indeed IF the so-called benefits were explained to you, then you have an extremely strong challenge to bring against the bank for a mis-selling claim. Experience suggests that the bank’s first reply will be to turn down your allegation based on the fact that they would have automatically sent you a Welcome Pack, and the charge would have been itemised on your bank statement each month. But this ‘standard procedure’ approach does not provide evidence that you agreed to the account in the first place. If you don’t recall agreeing to such an account the vital questions stands: can the bank really show you agreed to the up-grade? With so many people completely unaware of what they have been paying for, and what benefits they are entitled to, the banks have clearly been guilty of failing to provide completely transparency in their dealings with customers. It’s not good enough, it’s not fair, and banks’ customers who have been on the receiving end of this behavior are just beginning to realise that they CAN get their money back, with a pleasing chunk of interest. Find out if you qualify for a refund: Freephone 0800 007 3777.