What is a packaged bank account?

Martin Knipe // Bank Complaints


June 5  

What is a packaged bank account?

A packaged bank account is an account facility operated by one of the main high street banks in the UK.  It is identical to a normal current account, other than the fact a monthly fee is taken for a package of benefits which are attached to the facility.  The package account fee is taken monthly.

Packaged bank accounts were introduced in the mid to late 1990s by a variety of the banks who wanted to look at obtaining further revenue from their clients who just had a normal account facility.

The banks are very good at taking money away from business accounts or accounts where customers are looking to borrow but current accounts have always been a problem for them. They do not like the fact that they do not have any fees associated with the current account range and they wanted to address this as they could see it potentially being highly profitable.  This is because everyone needs a current account to operate successfully in any degree of finance throughout the UK.

How do I know if I have a packaged bank account?

Packaged bank account facilities are straightforward, in that if you have a current account and you pay a regular monthly fee of between £15 and £25 then you have a packaged bank account.

A lot of the account facilities are called nice names like “Silver” or “Platinum” to make the owner of the account feel that much more special, but apart from that it is a current account.  You have your ability to use online facilities, direct debits, standing orders and in some cases, depending upon your finances, overdraft facilities or other borrowing attached with a service by this current account.

Why are packaged bank accounts wrong?

Packaged bank account facilities are not necessarily wrong – they just have not been promoted or sold correctly to a large number of people.

This is the problem that the banks have all the way through when dealing with clients because rather than provide a product and ascertain whether that product is worthwhile to a client which provides value for money, they go away and work out a particular product and then look at flogging it to any client in order to maximise their own profitability at the expense of the clients’ monies.

We never think that the banks are going to learn about extorting money from customers in this way, so we grow to just expect it and have to deal with the consequences retrospectively.  This is annoying because when things like packaged bank account facilities are designed, they can be useful to people.

People can use travel insurance and breakdown cover and it is nice and simple because it is all lumped together in one.  However, when the banks go ahead and sell it, they do not establish if the customers are going to benefit from the particular elements of the product, or not.  For example, people may have travel insurance but do not go abroad, or they go on holidays which include something like skiing which some of the basic travel insurances do not cover.  This is because travel insurance involving skiing requires specific levels of cover due to the risks attached.

Can I make a claim for the mis-selling of my packaged bank account?

If you have a packaged bank account facility and you are, for whatever reason unhappy with it, i.e. you do not like paying the money, you do not think it was any use, nothing was explained to you, then yes, we can look at recovering the premiums that you have paid and interest for a period of years.

There are never any guarantees of success, which is why we work purely on a no win no fee basis.  If you have a packaged facility and you want to look at recovering the monies in relation to it, then contact us.  We work purely on a no win no fee basis on your behalf.

Martin Knipe

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Martin Knipe