Are You One of The 22%?
PBA Claims have seen a sharp increase over the past year or so. As consumer awareness of yet another financial scandal increases, so too will the claims. So what are PBA claims, how do they affect you and what do you need to do to get yours started?
This article will answer those questions and more.
What Are PBA Claims?
PBA is the abbreviation for Packaged Bank Accounts. Packaged Bank Accounts are regular bank accounts that have additional perks associated with them. In exchange for those perks, the customer pays a monthly fee.
Monthly fees for Packaged Bank Accounts can be anywhere from £5 to £30 per month.
Just as we have seen with the PPI scandal that rocked the UK financial world over the past half a decade, PBAs have now been found to have been mis-sold in many instances. A recent study by YouGov estimates that around 22% of all packaged bank accounts were mis-sold.
Anyone that was mis-sold a PBA is entitled to claim their money back. This process is known as a PBA claim (not to be confused with the other financial scandal, PPI claims).
What Are Common Perks of Packaged Bank Accounts?
The type of perks you can get from a packaged bank account vary from bank to bank. You can usually expect there to be one or more forms of insurance as well as day-to-day benefits related to your banking.
Some of the most common perks associated with PBAs are:`
Overdrafts with reduced fees
Mobile Phone Insurance
Breakdown Cover for your car
In and of themselves, the perks can all be considered to be good things to have — for the right person in the right circumstances. And that’s one of the key points in this latest financial scandal. Too often, people were sold this special type of bank account when the perks associated with them were actually useless to them. For example, having breakdown cover for your car is potentially a great perk to have . . . but not if you don’t drive, don’t own a car or you have a company vehicle that already has breakdown cover. This is just one example of how the PBA claims scandal has gained such momentum over the past year or so. As more and more people become aware that they may have been mis-sold, so the PBA claims continue to rise.
Is Your PBA Right For You?
Packaged bank accounts are more complex than standard bank accounts. In addition to the familiar aspects of a regular bank account, a packaged bank account has a range of associated products to consider in addition to the everyday aspects.
For this reason, it can make determining whether your PBA is right for you or not somewhat challenging. One of the common complaints around PBAs is that the associated products were actually inferior to products and services that are available as individual standalone purchases.
One other thing to consider as you determine whether your PBA is right for you is whether you actually need the perks attached to it. If you don’t require those perks, it’s an indication you might not be getting value for money.
It’s these kinds of considerations that go into deciding whether the PBA claims process is something you ought to be considering.
Two questions to ask yourself right now are:
Are the perks attached to your packaged bank account any good for you?
Are those perks financially beneficial for you (or would you have been better off obtaining those services elsewhere as standalone products?)
How Were Packaged Bank Accounts Mis-sold?
Just as we have seen with the PPI scandal, there are a number of ways in which packaged bank accounts were mis-sold. Many of the mis-sellings of PBAs were related to banks and building societies promising more than they could deliver.
Moreover, many PBA victims complained that sales staff made them feel that they had no other option but to get a fee-paying account.
Let’s look at the common ways in which packaged bank accounts were mis-sold, which have given rise to the PBA claims scandal.
1. Ineligible due to your ageInsurance policies are renowned for having innumerable clauses tucked away in the small print. One such clause is related to age restrictions.
For example, travel insurance is often restricted to certain age groups, such as those below the age of 50. If you took your packaged bank account because of an insurance benefit that you weren’t actually eligible to use, you’re probably in a good position to start a PBA claim.
The sales staff should have been aware of the eligibility criteria and, more importantly, should have made you aware of it.
2. “You have to have it”One of the common complaints about the PBA scandal is in regard to victims reporting they were told they had to have the account. A common story is of the person applying for some kind of finance and the bank staff telling them they had to have a PBA in order to secure the finance.
That’s simply not true. Your bank cannot refuse your finance application based on whether you have a PBA or not. If you were told something similar, you were mis-sold and have a good case for winning your PBA claim.
3. “Your credit score will be improved”This is another example of sales staff lying to their customers in order to secure more commissions for themselves. Some people have reported they were told their credit score would be improved by taking a packaged bank account, but as with the above example, it simply isn’t true.
Whether you have a regular current account or a packaged bank account, your credit rating will remain the same.
If you were told this, you are in a good position to win back your money.
4. Pushy sales staff mis-led youIn order for your packaged bank account to have been sold fairly, you should have been told everything you needed to know. At the same time, you should not have had any information withheld from you.
Some sales staff were a little overzealous in their bid to sell more PBAs, with the result that many customers were mis-led. Anyone that was mis-led into taking out a PBA is entitled to claim their money back.
5. You weren’t told you needed to registerAs you read earlier, it’s estimated that around 22% of all packaged bank accounts were mis-sold. That means a large number of people were happy with what they were getting. The problem for many of these people is that when they came to use a particular insurance, they discovered — way too late — that they weren’t covered.
Because to activate the insurance in question, they were supposed to have registered their car or phone or whatever the insurance was for when the account was setup. Many people weren’t informed of this rather critical point. As such, anyone that had this happen to them is more than likely entitled to start their PBA claim and win their money back.
6. Fee added covertlyThis reminds us of one of the common ways in which payment protection insurance was mis-sold: adding it on without the customer’s knowledge. There’s not much to say beyond that.
If you’ve discovered you’ve been paying for a Packaged Bank Account that you didn’t agree to having, you can claim your money back.
7. Price hiked without notificationAs we’ve mentioned, of all the packaged bank accounts in operation today, many were sold fairly. What can turn a fair sale into a PBA claim, however, is when the cost of the account was increased without notification or agreement from the account holder.
If you knowingly took out your packaged bank account but later found the price had suddenly gone up without notification, you may be in a good position to initiate a PBA claim.
8. Prevented from cancellingSome people with packaged bank accounts have reported being prevented from closing the account. In many cases, these people have reported being told it’s not possible to close a PBA.
As with some of the previous examples of mis-sold PBAs, this is also not true. You can close your PBA anytime you wish and downgrade it to a regular current account at your own choosing.