Paid for bank accounts
The majority of high street banks such as HSBC (including First Direct), Lloyds (including Halifax and Bank of Scotland), Santander (including Abbey and Alliance & Leicester), Barclays and RBS (including NatWest), have been caught mis-selling paid for bank accounts, leaving an estimated 1 in 5 adults paying for ‘deals’ they don’t want or need.
Customers can end up paying up to £300 per year for insurances that may may not even qualify to use. Life cover, mobile phone cover, travel insurance and break down cover are the most common products that form a Packaged Bank Account, and customers can pay anything between £5 – £30 fee per month for these so-called perks.
Potentially £BILLIONS in compensation
Our experts have looked closely into just how much this new scandal could end up costing the banks, and the figures are huge, so let’s take a closer look to see how we estimate that the total bill could run into the £BILLIONS.
- There are estimated to be 10 million active paid for bank accounts in the UK
- Banks are accepting liability on a large percentage of complaints made
- The Financial Ombudsman Service then find that a significant % of rejected complaints were in fact mis-sold
- This sees that the majority of Packaged Bank Accounts have been mis-sold
- Based on 10 million accounts being active, even if 1 in 2 were mis-sold, that is 5 million
- The average compensation payout, based on our figures is above £1,000
- So, even based on conservative figures, 5 MILLION mis-sold accounts at an average of £1,000 = £5 BILLION!!!
This figure doesn’t even take into account the thousands, or even millions, of Packaged Bank Accounts that have been closed!!! You are still able to claim on a closed account so our figure may well be an underestimation.
Sales driven by profits
There’s a simple reason why banks have mis-sold ‘paid for bank accounts’, and that is the HUGE profits that they generate. With a £12 per month packaged bank account costing just £3 to set up it’s easy to see why banks have targeted staff to sell these accounts in their droves.
Paid for bank accounts is sure to be the next big mis-selling scandal. After the massive PPI scandal we would like to think that banks had learnt their lessons, but it’s now abundantly clear they’ve done the polar opposite and continued to use underhand tactics in order to profit from their customers.
To make matters worse, the banks have also been caught handling complaints unfairly. Sound familiar?!
In the vast majority of instances the banks did not fully explain what the account entailed and what we were all paying for. They didn’t offer us an account without the insurance products. They didn’t even make sure we were suitable for the products they sold. What use is breakdown cover if you don’t own a vehicle?!
Last year the FCA ordered that banks and building societies changed their selling tactics to ensure that all paid for bank accounts are suitable for customers needs. Time will tell whether the financial sector have heeded this warning, but experience points in only one direction unfortunately.
Your Money Claim are the experts when dealing with financial claims such as PPI and Packaged Bank Accounts, so why not start your claim today?