Packaged Bank Accounts- The Latest ScandalAug 28, 2017
£1 Billion has been set aside for mis-sold Packaged Bank Accounts
After years of questionable behaviour within the banking industry, it seems customers are still hesitant to call the banks to rights, whether because they believe it will affect their relationship with their bank or from a genuine disbelief of any wrongdoing.
But let’s look at the facts. It was the banks who mis-sold Payment Protection Insurance (PPI) to millions of their customers and when challenged tried to avoid being held accountable for their actions. Furthermore, it is the banks who continue to reject many valid claims leading to additional delays for their customers and a heavier workload for the Financial Ombudsman Service (FOS).
A common response when speaking to our customers is that they have spoken with their bank and have been reassured that they have not been mis-sold PPI, and to be honest, as a customer, why would you question that? Well, the FOS recently released figures that showed between April and June 2016 57% of all complaints brought to them in relation to mis-sold PPI, where the bank had rejected a complaint and declined to make an offer of compensation, were adjudicated in favour of the customer and the bank was ordered to pay compensation.
To explain in short how we see if PPI has been mis-sold; with your authority we contact your bank, they provide us with information that they have on record regarding all previous agreements between you and the lender in question, and if PPI is there we will investigate further as to whether it was originally mis-sold or not. So if we can do this, why can’t they?
The mis-selling of Payment Protection Insurance is the biggest mis-selling scandal in UK financial services history – but is it the only one? In tactics all too familiar to ones used to mis-sell PPI policies, reports of customers being sold Packaged Bank Accounts (PBA) they did not want or need have come to light in recent years.
In response to this, at We Fight Any Claim we offer our customers the opportunity to have their PBAs reviewed to ensure that any fees paid are justifiable. Nevertheless, customers are cautious about looking into this, for fear of upsetting their bank, or due to the belief that such established organisations would never knowingly offer a service that is not needed. However, £1 billion in compensation which has already been set aside for complaints against these accounts suggests otherwise.
An article featured in ThisisMoney.co.uk tells of a Natwest customer who was advised that taking out two different current accounts would improve her credit rating. This, in fact, was not true and is an example of past techniques used by some banking staff to meet sales quotas, which in this case resulted in the customer paying £28 a month for accounts she simply did not need.
The customer contacted the bank directly, only to be told that although they agreed that the accounts were similar, and the associated benefits had never been used, her complaint would not be upheld. However, ThisisMoney.co.uk contacted Natwest to query their reasons for rejecting the customer’s complaint and Natwest refunded the premiums paid towards the two accounts, resulting in close to £1,700 in compensation. Pretty good for a complaint that the bank originally rejected, wouldn’t you say? Once again we refer back to the recently released FOS figures which show that between April and June 2016, 23% of cases, following a bank’s decision to reject a complaint for mis-sold PBAs, resulted in payment of compensation in favour of the customer.
Time and time again we are hearing new reports of misconduct within the banking industry, yet we still find customers are reluctant to investigate any wrongdoing. A smokescreen to overshadow the past malfeasance of the banks has been able to paint Claims Management Companies (CMC) as the villain in the tale. Nonetheless, customers should not be diverted away from the matter at hand: the banks have acted wrongfully and it is only right for them to be held accountable.