Reclaiming package account fees: what you need to know
Package bank accounts can sometimes seem appealing, although it’s an extra monthly expense, they include all kinds of useful extras including mobile phone insurance, higher interest rates, travel insurance and interest-free overdrafts. However, if you have one of these accounts but the added extras don’t apply to you then you may have been mis-sold the account, and therefore be entitled to a refund of £100s – possibly even £1,000s.
To work out whether you might be able to make a claim you need to ask yourself a few questions. Here we have a full guide to reclaiming those package account fees and effectively reducing your monthly outgoings by only paying for the services that apply to you.
Is your account right for you?
If you’re considering making a claim then this is the first question you need to ask. If you use the services and think that they apply then the likelihood is you’ll think it’s brilliant because you get an extraordinary amount for such a low monthly cost.
If you went out and made a conscious decision to invest in one of these accounts then you’re likely to be happy with what you’re receiving because, they’re great accounts if they are what you really need.
Establishing whether the account is right
If you don’t need the benefits that come along with them – generally bundled insurance and breakdown packages – then you don’t need a package account. End of.
If you do need some or all of the benefits then consider the cost and whether you could get the same insurance cover and breakdown cover etc. elsewhere for less. Although £15 a month might not seem like a lot, when you consider that’s £180 every year, it’s reasonable to think that you could certainly get some services much cheaper.
Use comparison websites to compare the price of your package account with buying the extras independently. Although the package account might work out cheaper, it’s always worth checking.
Cancel right away
If you find that you can purchase the benefits you need more cheaply elsewhere, or the benefits that come with your account are irrelevant to you, cancel your account right away and request to be moved to a fee-free account. Even if you’ve been mis-sold the account, you’ll still be able to make a claim after you’ve cancelled and stopped paying the monthly fee.
Have you been mis-sold?
If you’ve been sold an account with insurance then the salesman should have looked into the insurance offered and checked that you were eligible. A lot of the time, this is the reason you’re able to make a claim, because in many cases this has failed to happen.
In order to be in a positon to make a claim, you need to fill one or more of these categories:
Told the account was essential (e.g. to get a mortgage)
If you were told that you needed a package account to apply for a loan, mortgage or any other product, then this is mis-selling. Sometimes you’ll have been lied to completely so that you agree to the account. At other times, sales staff just won’t have informed you about a free alternative.
Insurance doesn’t apply
When you agree to take out one of these accounts, whoever’s selling the account to you should check whether you’re eligible for the benefits, specifically any insurance that comes as part of the package.
There have been a lot of cases of older people attempting to claim on the travel insurance that comes with their bank account, only to be told they’re ineligible. A lot of the time insurance policies – especially travel insurance – will have upper age limits. However, this isn’t the only example. Other things that could make you ineligible include not being asked about medical conditions which could invalidate cover or developing a condition while having the account which makes the insurance invalid – your bank should check you’re still eligible for all insurances each year.
Mis-lead when taking out the account
Bank staff are generally under pressure to sell this type of account to customers which means that some will use any measure necessary to get you to agree.
If the account wasn’t fully explained to you, a salesman wouldn’t accept no as an answer, you were told you’d get other discounts than those listed or you were told you’d be eligible to claim on insurance policies when you weren’t, then it’s likely to account has been mis-sold and you’ll be in a position to make a claim.
You weren’t told about a price rise
If the monthly fee on your account rises then you need to be informed – many banks have been known to hike the prices with no notifications.
Fee added without your knowledge
There are plenty of people who’ve made successful claims because they weren’t aware they were even paying for their account. In a lot of cases it’s not until people have looked back at their statements and realised there’s an account fee of between £10 and £25 a month for an account they didn’t agree to.
When trying to cancel you were forced to keep it
If you tried to cancel the account but were told you had to keep it then you’re likely to have a case for reclaiming.
However, there’s a difference between being told you have to keep the account and being encouraged to keep it. Be aware that unless high-pressure sales tactics were used, the latter is unlikely to be interpreted as mis-selling.
Told a package account was the only way to get an overdraft
The majority of the time, packaged accounts do offer better overdraft facilities – usually the maximum over draft or the interest-free amount available is much higher – so depending on the overdraft you requested, a package account may have been the best option. However, overdrafts are available with other types of accounts, so if you were told you needed a package account to use an overdraft facility, you’re likely to have been mis-sold.
You weren’t informed about needing to register to claim insurance
If you weren’t told you needed to register your phone or car to make use of the insurance or breakdown policies then you may be able to make a claim – especially if you’ve tried to claim and found out you’re unable to because you haven’t registered your vehicle or device.
All of this is a lot to take in but there are plenty of template letters out there to help you through the reclaiming process. If you reclaimed PPI recently and now feel that the ‘do it yourself’ option isn’t for you then companies like Quantum Refunds can reclaim the money for you so you don’t have to deal with any of the stress.