Uncovering the Truth about Packaged Bank Accounts

Packaged bank accounts or a current account provides people with an extensive list of benefits. A packaged bank account usually consists of the following benefits and services:

  • Extended warranty
  • Travel insurance
  • Loyalty rewards
  • Mobile phone insurance
  • Overdraft with low rates
  • Breakdown cover
  • Gadget insurance
  • Fraud protection

How Packaged Bank Accounts (PBAs) Work

Banks charge account holders a monthly fee ranging from £8 to £25 and even though it does not sound that bad, in reality, packaged bank accounts are useless. Account holders uncover this fact once the bank sells them the benefits of PBAs.

Later, banks tell them they are ineligible to obtain the benefits mentioned under PBAs or the account holders discover that they do not really need or want those benefits. Still, people find themselves signing up for PBAs, only to regret their decision later on.

Did you know over 10 million residents in the United Kingdom hold a packaged bank account?

People are taking their claims of miss-selling up with the Financial Ombudsman. They have discovered fault with 70% of those accounts.

How Banks Force PBA Down People’s Throats

When customers visited the bank, asking for a loan, mortgage, or credit card, the employees told them that in order to receive a loan; they would need to obtain a packaged bank account. Otherwise, they would not be qualified for a loan. Others were told they could not obtain an overdraft if they do not sign up for a packaged bank account.

What Banks Do Not Tell You

Banks needs to disclose all the details of the PBA and you need to ask them questions pertaining to it. They will tell you about the benefits regardless if you are eligible for them or not, as their task is to sell you the package to you to meet their sales target. This resulted in some salesperson not telling the customer about the monthly fee they will have to pay to obtain the benefits they are telling them about.

Another example of banks sold the PBA was telling the customers about the benefits of having phone insurance, but leaving out the details on how the insurance is not applicable to iPhone users. Some have even gone to tell the customer on how a PBA improves their credit rating, but that is false information.

Has This Happened with You?

If a bank told you that there was no other way for you to obtain the finances you seek unless you open a PBA, they miss-sold you the package. Banks cannot compel people to take out a packaged bank account and they cannot refuse to give you financial support based on your refusal to obtain one.

What Should You Do?

You can make a miss-sold packaged bank account claim against your bank. If your claim proves successful, your bank will downgrade your account back to a basic account. You will not have to pay a monthly fee anymore and will lose all the benefits. However, if you are using the benefits, reconsider making a claim.

Author: Josphine Smith

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