Were you mis-sold a packaged bank account?
What is a packaged bank account?
A packaged bank account is a current account you pay a monthly fee for — typically £10 to £25 — in exchange for extras like travel insurance, mobile phone cover, breakdown cover, or preferential rates. They were sold heavily by UK high-street banks from the early 2000s onwards.
For some customers these accounts are genuinely useful. For many others, the perks were irrelevant, already duplicated elsewhere, or impossible to claim on — which is where mis-selling comes in.
How were they mis-sold?
The Financial Ombudsman Service has upheld thousands of packaged bank account complaints. The common themes:
- The account was sold as mandatory — customers were told they had to upgrade to keep a feature of their existing account (like an overdraft).
- Eligibility wasn't checked — the travel insurance excluded pre-existing medical conditions, or the phone cover only applied to phones under a certain age, but none of that was explained at the point of sale.
- The cost was downplayed — monthly fees were framed as "only £15 a month" without ever being totalled into a yearly or multi-year cost.
- Existing cover was ignored — many customers already had travel or breakdown cover elsewhere, making the packaged version worthless to them.
- Renewals were automatic — fees kept being deducted for years even though the customer never used the benefits.
What the rules say
Under FCA rules (ICOBS and the Consumer Duty), firms must only sell products that are suitable for the customer, and must explain clearly what they cost and what they cover. Selling someone a travel insurance bundle when they can't use it — and never checking — falls short of that standard.
How much could you get back?
Refunds vary depending on how long you held the account and how much you paid. A typical successful complaint results in a refund of:
- All monthly fees paid (often totalling £1,000 to £3,000+ over several years)
- Plus 8% statutory interest on each monthly payment
- Minus the value of any insurance claims you actually made
Some long-standing customers have received refunds of over £5,000.
How to tell if you have a claim
Ask yourself:
- Did you ever use the travel insurance, phone insurance, or other perks?
- Were you told the account was required to keep an overdraft or other feature?
- Did anyone ever review whether the cover was suitable for your circumstances?
- Are you still being charged a monthly fee for an account you don't really use?
If the answer to several of those is no, it's worth having the sale reviewed.
What should you do?
Gather a few basic details — your name, the bank, and a rough sense of when you opened the account. You don't need paperwork. A claims specialist or the Financial Ombudsman Service can access the records needed to assess your case.