What is a Packaged Bank Account?
A packaged bank account is typically a current account bundled with a range features such as the following;
- Insurance policies (travel insurance, mobile phone insurance etc.).
- Access to preferential terms for other financial services for example overdrafts, personal loans or mortgages.
- Sometimes non-financial products and services such as early access to event tickets.
- The customer pays a monthly fee for these services and the account may be labelled as a “premium account” or an “added value account”.
- If you have any of these features with your bank account, and are paying a fee for these services - you have a packaged bank account.
You may not even be aware you are paying for a packaged bank account - if you are unsure whether you have any of these services with your account and paying a fee for them, you can check with your bank or look at your bank statements.
Are All Packaged Bank Accounts Bad?
Packaged accounts can be an excellent way of saving money for some, but for others they can be entirely useless and wasteful. If you have had the benefits of having a packaged account properly set out to you and chosen one based on a rational decision, it may be the cheapest way to get many types of insurance. However, you may have been sold an account by a sales agent at the bank with a strict target to meet, without having the benefits outlined to you or without having your eligibility properly assessed. This is mis selling and you could be owed thousands, as banks have been found to have systemically mis-sold them.
Why Do Banks Offer Package Accounts?
Packaged bank accounts are usually sold rather than bought. Customers do not tend to look for this type of account but are more likely to be upgraded by their bank or offered a packaged bank account rather than a free account when opening a new current account. Packaged bank accounts are offered by almost all major banks. They are an important financial product, differentiating banks in the market, enabling them to attract new customers and retain existing ones. Packaged bank accounts are designed and marketed with convenience for the customer in mind. However, the bundling of insurance products creates complexity for customers and may create confusion in understanding whether the account is right for them, and what the alternatives may be. When packaged bank accounts are being offered, it is important that sales agents make the customer aware of their suitability for the product, and whether there are more appropriate options for the customer. If this is not complied with, the packaged accounts are being mis sold.
Why Are Packaged Bank Accounts Being Mis Sold?
The type of insurance policies provided in a packaged bank account are normally considered low-risk insurance products. However, because a number of these insurance products are being sold in a bundle together with a current account, there is a risk that the banks sales agents may not give adequate attention to the insurance policies in the sales process. This means consumers may not receive the information they need to properly consider the option of the packaged bank account being offered, shop around with other providers, or consider the alternative of having a non-packaged bank account and separate, more suitable, insurance cover. As a result of this complex system, there is a risk that consumers may purchase insurance policies for which they are ineligible. Customers may be ineligible either at the point of purchase of the account or may become ineligible, for example because of a condition relating to age that was not made apparent to them by the sales agent. Furthermore, the insurance may merely be unsuitable for their needs, yet the sales agent has not pointed this out to them or made the customer feel pressured to take the package account. You might have been mis-sold a packaged bank account - check out our packaged bank account claims calculator page to get an idea of how much you could claim today.
Start Your Claim with Kangaroodle Today
Here at Kangaroodle we can help you claim back the charges you have been paying to your bank for these unused or underused services. We work on a no win no fee basis*. After reading this information, if you feel you may have a claim for compensation or still unsure about whether you have a claim, call our team at Kangaroodle and let our experts help you.