With thousands of dissatisfied customers raising complaints each year, packaged bank accounts (commonly referred to as PBA) continue to be one of the most complained about subjects to the Financial Ombudsman Service.
Growing evidence now suggests that several of the big banks including Halifax, Lloyds, and the subject of this guide Barclays, have been found guilty of using unethical or strong-arm tactics to convince people into getting PBAs they do not need or cannot claim insurance covers on.
Barclays is one of the most affected, with the main high street banks setting aside almost a billion pounds in funds for compensating customers of mis-sold packaged accounts.
People have been claiming a refund on these type of accounts for several years now, but there are many more disgruntled customers out there who are yet to claim, are you one of them?
If you have a Barclays packaged bank account (or one from any other bank for that matter) that you are unhappy with, you may be entitled to a refund of hundreds of pounds, or even thousands, depending on how long you have had the account.
In this guide you’ll find out when your Barclays packaged bank account (or any other PBA sold by a bank) qualifies as having been mis-sold, and how you can back out of an unsuitable packaged bank account and how to claim a Barclays packaged bank account refund.
What Is A Packaged Bank Account?
A PBA is much like any other bank account.
You can deposit money into it to accumulate interest, use it as a current account, or set up overdraft services. However, PBAs charge the holder a monthly fee. The extra charge can vary wildly and can be anywhere from £1 to £75 (although most would be towards the lower end), in exchange for a ‘packaged’ set of additional benefits.
Typically, a packaged bank account may offer travel insurance, car breakdown cover, mobile phone/device cover, or home insurance, as examples. Such benefits can be in addition to a host of account perks such as zero or reduced interest on overdraft facilities, low-interest loans, as well as exclusive and loyalty products from the bank.
Some banks also partner with other businesses and throw in non-account related advantages such as retailer discounts, attraction and event tickets, or access to airport lounges etc.
In addition to the provided benefits, PBAs usually require the account holder to meet specific criteria.
For example, this can include having a certain amount of money in the account, or falling into a specified income bracket, or holding a certain amount of investable assets with the bank, etc.
Is A Packaged Bank Account A Good Investment?
A Packaged Bank Account can be an appealing option, in the right circumstances, for several reasons.
Convenience
For one, it is convenient. Having your phone, travel, car, and home insurance covered within your bank account saves you from the hassle of looking for multiple insurance covers.
Small Monthly Fee
Secondly, the fact that you only usually need to pay a relatively small monthly fee (to enjoy various insurance covers and other benefits) makes the offer even more attractive.
Joint Packages
What’s more, a joint packaged bank account incurs the same service charges as a single account holder, yet covers both parties.
Basically, if the PBA includes insurance covers and benefits you would buy anyway, but at a lower overall cost than other options, then the deal could well be worth it.
However, there is a flip side, and a huge number of customers have found they do not really ‘benefit’ from their PBA at all. This could be due to a number of reasons, some of which are shown below.
Benefits Are Rarely Used
It makes no sense to keep the PBA if you never get to use the benefits on offer (e.g. if you rarely travel outside the country or do not own a car).
Benefits Cost More Than Buying Them Separately
Also, if the monthly payment you are making is costing you more than it would to buy the insurance products separately, a packaged bank account would then become an unnecessary expense.
Paying Twice For The Same Insurance
Another scenario where it does not benefit the customer to have a PBA is if you already have insurance policies for the covers offered with the account. Securing double insurance often makes things difficult when you want to make a claim and you would be unable to claim for the same loss twice.
UK Laws On Packaged Bank Accounts
When selling packaged accounts, banks were initially only required to do the following.
- Be clear about the cost of the account
- Divulge full benefits offered within the account
- Convey the rules and limitations applicable to the account – e.g. a phone cover that excludes high-end gadgets such as apple, the exclusion of seniors aged 70 and above from a travel insurance deal, and so on.
As a result, this left a legal grey area which banks exploited by selling packaged accounts to anyone, rather than those individuals who would actually benefit from the benefits offered.
Consequently, many customers ended up cancelling their PBAs whilst complaints about this form of mis-selling continued to rise. In turn, this prompted the Financial Conduct Authority (FCA) to intervene back in 2013 and introduce new rules on packaged bank accounts.
For the sake of customer welfare, new rules came into play with more responsibilities for financial institutions. So, to avoid cases of a mis-sold product, banks now must also:
1. Ensure You Are Eligible To Claim On Each Included Insurance Cover
With packaged accounts offering at least one or more insurance covers, it is up to the bank to conduct eligibility checks on all potential customers.
Vetting includes inquiring about a customer’s age, monthly income, state of health, residency status, the type of gadgets in their possession, the condition of any owned vehicle, and so on.
2. Provide An Annual Eligibility Statement
Just because you were eligible for a packaged account at the time of opening, does not mean you will be for the rest of your life.
Personal circumstances may change in your life like retiring, surpassing an insurance cover’s age limit, or getting a new gadget, thus rendering the account no longer a suitable fit.
Consequently, banks have the duty of generating an annual statement of eligibility to all its packaged bank account holders. With this document, you can review your circumstances annually to determine if you will continue to benefit from the account.
Is It Possible To Get Paid Back PBA Fees From Barclays Bank?
In general, you can claim a refund of your PBA fees if any UK bank did not fulfill all its legally mandated duties or was not transparent when selling you the account. More specifically, chances of getting a refund are higher if your situation falls into the following circumstances:
- You never had the intention of getting a packaged account until a pushy bank agent pressured you to take on the option
- No one informed you that the account is optional
- There was no provision of clear information about the cost and full benefits of the PBA before you took on the account
- The person facilitating the opening of your packaged account never asked if you already had a similar insurance cover
- You were misled into believing that opening a PBA would increase your likelihood of getting approval for a loan or receiving other types of financial services in the future
- You were misinformed regarding the packaged account benefits – e.g. told you could make a claim when you are not even eligible for an included cover
- No one told you that your car and gadgets had to be registered to make an insurance claim
- The bank upgraded your packaged account without notifying you, or switched you from a free to a fee-paying packaged account without your knowledge or expressed consent
Barclays Packaged Bank Account Refunds: How Do I Start My Claim?
To get the refund claim started, you first need to make a formal complaint with your bank. Barclays has an online banking platform where you can log in and start a webchat, send out a secure message, or fill out an online complaint form.
Whichever route you choose, make sure to keep copies of all correspondence, right from when you initially raise the complaint. It is also essential that you let the bank know you mean business by:
- Explaining why the account has not been appropriate for you
- Attaching bank statements showing you have been making payments
- Being clear that you want a refund of all payments and express the intent to close the account or switch to a standard account
- Indicating that you expect a response within the legal timeframe of 8-weeks
If you are unhappy with their response or they do not answer, you can get in touch with the FOS from their official website by filling in a complaint form. It is also necessary to attach all paperwork supporting your claim, e.g. messages to your bank regarding the matter, the bank’s response (or lack thereof), and so on.
The ombudsman service will send you a letter or email acknowledging receipt of your complaint and an assurance that they are looking into the matter.
After about 3 to 6 months, the ombudsman will deliver their judgment, which will include the order to have you refunded if the bank is at fault. Should the FOS find in favour of the bank (which is highly unlikely if you have a strong case), you have the final option of suing the bank for a mis-sold packaged account in court through a professional solicitor.
The law also provides special provisions for the following situations:
- You can still seek a refund if the account was closed or downgraded to a regular free account in the past 3-years.
- A customer can make a PBA claim for an account that is older than 6-years but is still active.
- If a PBA closed over 6-years ago, but still has records of the account’s existence and irrefutable proof that you were the victim of a mis-sale, they may also qualify for a claim.
What Are You Legally Owed From A PBA Refund Claim?
If the bank or the FOS upholds your claim, the law entitles you to:
- A full refund of all paid monthly fees
- Compensatory flat interest calculated at 8% of fees for every year the account was active
Barclays Packaged Bank Account Refunds: Where To Get Help Starting Your Claim
Although rules around the sale of PBAs have tightened since 2013, mis-sold packaged accounts still feature highly on the list of most complained about products.
So, if you have a packaged account that was wrongly sold to you, start the claims process as soon as possible and get the refund you deserve.
If you would prefer an experienced advisor to handle your packaged bank account claim for you, instead of trawling through the process yourself, we have help on hand. It is quick and easy to make contact with an experienced claims advisor ready to give you free, no obligation advice, by submitting your claim here.
