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Reclaim Packaged Accounts

Mis-sold? You could get back £100s

If you pay or paid a monthly fee for your bank account, you may be able to reclaim £100s or £1,000s. There’s growing evidence these accounts were systemically mis-sold – with many people flogged worthless added insurance.

This is a full step-by-step guide to reclaiming package account fees for free – including template letters. Many reports are coming in of successes. Some have reclaimed a whopping £3,000.

Step 1. Are packaged accounts right for me?

Packaged accounts can be brilliant, but they can also be useless. These accounts are where you pay a monthly fee for your account in return for benefits, most often bundled insurance policies. If you've chosen one based on a rational decision, it's probably a good account as they can be the cheapest way to get many types of insurance.

But if you were flogged one by a pushy sales agent, you could be owed serious cash, as banks have been found to have systemically mis-sold them.

How do I know if they're right for me?

If you don't need the insurance, then packaged accounts aren't right for you. Simple.

If you do, it's all about whether it's cheaper to buy the insurance elsewhere, so do the maths. Don't think £15 a month, think £180 a year, so always multiply the monthly cost by 12 to get the cost per year as the way to compare insurance costs to see if it's worth it.

Compare the price your bank offers with buying independently. Always check if you can get the insurance cheaper elsewhere. See our Travel, Mobile and Breakdown cover guides for options.

Cancel NOW if it's useless

If you've got a useless packaged account, cancel it to stop the rot and ask to switch to a fee-free account. Don't worry if you were mis-sold, you can still reclaim if you do this.

Quick questions:

Are these accounts always bad?

Is this the same as bank charges reclaiming?

How do I know if I've got a packaged account?

I think that card/identity protection is part of my packaged account, can I claim?

Step 2. Have I been mis-sold?

If you were flogged insurance, the rules mean banks need to check the cover is suitable. It's this that has often failed to happen. The key is what you were told (or often NOT told) at the point of sale or upgrade.

Banks have a responsibility to ensure the insurance was right for you at the point they sold it.

Here are the key mis-selling categories. If you fit one or more of these, you're likely to have a case (if any apply, go to the how to reclaim section):

The mis-selling checklist

  1. I was told I had to get it, eg, to get a mortgage

    Customers were often told they had to sign up to a packaged account to get a loan, mortgage or other product. Or that their other application would be declined if they didn't get a packaged account. This is blatant mis-selling.

    Sometimes it'll be a straightforward lie that you had to get the account, but on other occasions, sales staff wouldn't have told you about a free alternative.

  2. I was too old for the insurance

    One of the big problems with these accounts is people signing up thinking the insurance protects them, but when they claim they're told they're ineligible. A classic case is people too old to claim on travel insurance, as these policies often have upper age limits - but it's not the only example.

    You could be ineligible for the insurance if...

    • You weren't told of key exclusions such as an age limit, which is typical on travel insurance.
    • You weren't asked if you had any issues that may stop you from claiming, eg, a medical condition that may invalidate travel cover.

    Also, if the bank didn't check you were eligible for the insurance each year, you could have a claim.

  3. You were mis-led into taking out the account

    The regulator has said packaged accounts are "generally sold rather than bought". We've heard from bank staff under incredible pressure to sell these accounts. Examples include:

    • You were told it was a privilege to get the account, but the product wasn't fully explained to you.
    • A pushy salesman wouldn't take no for an answer.
    • You were told you'd be eligible to claim when you weren't.
    • You were wrongly told you'd get big discounts on other insurance if you took a packaged account.
    • You weren't told the full cost.
    • Note: New rules came into force in March 2013 to stop this high-pressure tactic, but that doesn't stop you reclaiming if you bought under duress.
  4. It hiked the price and didn't tell you

    Quite simply, you need to be told of a price rise. Yet many banks simply upped the price without notice.

  5. The fee was added without your knowledge

    We've heard from plenty who didn't realise they even had a paid-for account until scouring their statement - possibly the result of a bank error, an over-zealous salesperson, or added by deceit without your permission.

    This can happen when getting an account for the first time with a bank or for existing customers 'upgraded' without their consent. Dig out old statements to check you're not paying out £10-£25/month for an account you didn't sign up for.

  6. You tried to cancel but were forced to keep it

    If you were told you had to keep the account when you asked to cancel it, it's likely you've got a case for a reclaim.

    But there's a fine line between being forced to keep paying up and sales staff strongly encouraging you to keep it. It's far less likely the latter could be interpreted as mis-selling, unless high-pressure tactics were used.

  7. You were told it was the only way to get an overdraft

    Many have told us that they went to their bank to ask for an overdraft, but were told the only way they could get one was to get the packaged bank account.

    It's a fine line, as sometimes the packaged accounts do have higher maximum overdrafts than normal, 'free' accounts. But, if other accounts that allowed overdrafts at the level you wanted were available, you could have been mis-sold.

  8. No-one mentioned you needed to register your phone/car

    For example, your iPhone gets stolen and you think "it's OK, my packaged account will cover it". You go to make a claim, only to discover that because it wasn't registered - which no-one mentioned it had to be - you're not covered.

  9. You were told having one would improve your credit score

    Good financial management will help your credit score, not a packaged account specifically. If you were told this, and took one out as a result, head to step three for what to do next. And if you're after ways to boost your credit score, see our Credit Rating guide for tips to making yourself more financially attractive.

I think I was mis-sold. How much can I get?

If you're mis-sold you should get the fees you paid back, plus interest. So quite simply, if you paid £15/month for two years you should get £360 back (£15 x 24 months) plus interest.

But be prepared for a fight. We've seen some banks just change the insurance, so customers become eligible, as a way of appeasing complainers. But that doesn't change the fact that you were still paying for useless cover, so hammer home that you want ALL your fees back.

Quick questions:

How is the interest calculated?

What if one person was eligible for insurance on a joint account, one not?

Some inspiration... 'I got £700 back'


MoneySaver Robert emailed us his story. He was promised an overdraft and an improvement on his credit score for taking out a packaged account with NatWest. He felt pressured into getting it, and never used any of the insurance policies.

After complaining to NatWest he was refunded £739, including interest, within hours.

Full story

And here are a few others from emails and our forum:

I wanted to have an overdraft of £700 and was told the only way I could get an overdraft was to take out an Additions account.

On this basis alone Barclays told me that I was mis-sold and thus I received everything I had paid to them over the previous 18 years and had a credit into my account of over £2,950 including interest! And I continue to have the same overdraft rate. So a big THANK YOU to you all at MSE!Jason, via email

Thank you so much, Martin. I read on your site about being mis-sold a bank account that had benefits I already had, and decided to complain. A week later I had my account credited with £1,612.77. I am extremely happy and wanted to thank you very much." Fiona, via email

I sent an email to Lloyds regarding the Gold packaged account I'd had with them from 2001 - 2005. They called back within 2 weeks and agreed that is was mis-sold. I got £760 the following day.2991katie

Step 3. Complain to your bank

If you feel you have been mis-sold, first complain directly to the bank. The most important thing to understand is that with financial firms you have a RIGHT to be 'treated fairly'. Think carefully about why you've not been treated that way.

When contacting the bank, explain why it didn't treat you fairly. Gather together evidence, such as copies of documents, to help you.

Help making an official complaint

Speak to your bank or check its website for the address of the complaints department. Generally these things are best done in writing, but if that's too difficult, don't worry about calling. Just ask it's noted down as a formal complaint, and also ask for written confirmation.

Don't feel you have to be formal. Just explain the point clearly, concisely and honestly as if you were explaining to a friend why you've been wronged. To help, we've put together a template letter to start you off - download it and fill in the blanks (use it to help start you off, but the more you write it in your own words, the better):


But there's something crucial you need to understand. At this stage, reclaiming's like a game of 'who blinks first?'. This is important, so we're shouting it...

Your bank may say "no". If so, don't worry. You can take your case to the Ombudsman.

FAQs on complaints:

How far back can I claim?

There's no difference if you signed up online or in a branch

I've claimed on one of the insurance policies. Can I complain?

I was eligible for insurance, but didn't use it. Was I mis-sold?

The account holder's deceased or needs help, can I do this?

If I reclaim the money, can I then keep my account?

Can they punish me for complaining?

Step 4. Rejected? Escalate to the free Ombudsman

If your complaint is rejected by your bank, don't assume that's the end of the matter. You have a right to take any complaint it's turned down to the independent Financial Ombudsman Service.

This is the official body for settling disputes between individuals and financial companies. It's a free service that acts as an impartial adjudicator. Present it with the facts, and it'll decide whether your account and the circumstances under which it was sold, were unfair, then decide what redress is required. In most successful mis-selling cases, this means a refund.

How to make a complaint

To get the ball rolling, you need to fill in the Ombudsman complaints form below, which must be hand-signed and posted. Also enclose any paperwork to back up your case.

It's important to note it won't look at your complaint until you've contacted your bank and given it eight weeks to respond, if you've been rejected.

For general guidance, as with the first letter to the bank, which you could always copy and paste into here, don't feel you have to be formal. Explain the point clearly, concisely and honestly, all in your own words, just as if you were explaining the situation to a friend.

Ombudsman complaint form: Ombudsman complaint form

Help to fill it out: Complaint form help

It's simple to fill in, though take care. If you need help filling this out, you can call it on 0300 123 9123 or 0800 023 4567, and it'll guide you through the claim, or use our step-by-step guide above. It's written in Microsoft Word so you can easily cut and paste sections or print it and have it next to you as you're filling in the Ombudsman's form.

The Ombudsman will send you a confirmation letter to say it'll look into your case and get back to you if it needs any more information.

Quick questions:

What are my chances of success?

How long will it take?

The Ombudsman unfairly turned me down. What next?

Unlike PPI, this is a very new area of reclaiming with more developments emerging regularly. Please let us know how you get on so that we can keep our guide up-to-date and help as many people as possible.

Ask us questions and give your feedback. Report your packaged account reclaiming successes and failures in our forum. Also let us know any extra questions you'd like us to ask the banks.