The recent increase in Packaged Bank Account Claims is another blow to the reputation of the The UK High Street Banking Sector as more complaints are received regarding the mis-selling of these products to their customers
Published Bank Account (PBA) claims are now gaining some momentum in the UK. Whilst not yet hitting the heights of the PPI reclaim industry, the banks are facing yet another scandal with further accusations about mis-sold products.
UK banks have suffered reputational damage over the last few years for various reasons since the financial crisis in 2009 and have had to compensate clients costing billions for mis-selling products. The problem for banks is now gathering pace as more PBA publicity is appearing surrounding the process for making claims, meaning that 25,000 people made complaints in the fist half of 2015 which is more than the number of claims on the whole in 2014.
What is a Packaged Bank Account?
UK high street Banks have sold and offered bank accounts that incur a monthly fee usually up to around £25 per month. These accounts generally come with additional benefits such as:
- Gadget insurance
- Emergency home cover
- Travel insurance
- Emergency vehicle breakdown cover
- Concierge services
- Ticket services
What’s the problem with Packaged Bank Accounts?
Many customers were automatically signed up for these deals by sales staff who may have exaggerated the benefits of the account. Even worse, some customers were told that these packaged bank accounts were their only option whilst others were told that if they took out a packaged bank account they would be more likely to qualify for a mortgage or other financial services.
Benefits of these accounts were often poorly explained so customers often had duplicate insurance cover – those using the bank’s insurance policies found significant exclusions in some cases when making claims.
Banks face claims running in some cases to thousands of pounds in reclaimed monthly fees.
The well-established claims industry is now gearing up for customers wanting help to make claims and will no doubt charge healthy commission fees for doing so.
Why is it a problem for banks?
The beleaguered UK banking sector takes another hit to its reputation and financial well being. Giving more weight and credence to the emerging challenger banking sector that can claim more moral high ground away from the dinosaur UK Retail high street banks.