FCA says consumers ‘treated unfairly’ over packaged bank accounts

A shock report by the UK financial regulator says thousands of people have had claims for mis-selling packaged bank accounts wrongly rejected or received too little compensation from their bank.

The report follows a thematic review on packaged bank accounts by the Financial Conduct Authority (FCA) which found 56% of those who complained received ‘an unfair outcome.’


The regulator was examining how effectively banks had implemented the new rules on packaged accounts introduced in 2013.

The rise in the number of complaints in late 2014 focused the investigation on this time frame. In a statement the FCA says: “The review suggested that too many customers who complained about being mis-sold packaged accounts during this period did not get the right outcome – a finding supported by the number of complaints the Financial Ombudsman Service upheld in that period.”

Complaint handling

Examining firms’ complaint handling procedures, the review found: “Firms did not consistently deliver fair outcomes for customers who complained that their packaged bank account was mis-sold. This may be a contributory factor in both the high referral rate to the Financial Ombudsman Service and the high uphold rate at that time.”

It added: “Where customers complained that their account was mis-sold, firms only achieved a fair outcome in 44% of cases. We identified detriment, or a likelihood of detriment, in 38% of mis-selling complaints, compared to only 9% of non mis-selling complaints.”


Sarah Pennells, of consumer website SavvyWoman, said: “I am quite horrified that the FCA has found that only 44 per cent of people received a fair outcome and that 38 per cent missed out financially.

“It feels like banks are still treating customers who complain as the problem rather than the banks’ mis-selling culture.

“The banks need to see this as an opportunity to improve their reputation. They have been telling us that they changed since 2008, but this report shows that not a lot has.”

FOS complaints

Last year the number of complaints referred to the Financial Ombudsman Service (FOS) more than doubled from 21,348 to 44,244

Some experts believe the report could open the floodgates for a new round of complaints as yet more consumers appeal the banks’ decisions.


Rachel Springall, at financial comparison site Moneyfacts, said: “If consumers are unhappy with their banks decision to not refund any fees or give them compensation for a poor service then they have every right to raise their complaint to the Financial Ombudsman.

“Consumers need to regain the power at voicing their complaint,” she added.


The FCA agreed, saying that some of those who felt they had lost out may already have appealed the decision with FOS and received compensation.

Spokesman Jonathan Davidson said: “We continue to believe that there is a place in the market for packaged bank accounts, as they can provide good value and convenience for consumers.

“But we expect these products to be sold fairly and for customers to have the information they need to make an informed choice. And customers should not have to complain to the Ombudsman to get a fair outcome if things go wrong.”

Additional review

The regulator now proposes an additional review of mis-selling complaints from March to May 2016 to test if banks have improved their complaint handling.

They also propose ‘a round table discussion with firms selling packaged bank accounts to confirm our expectations in relation to how they check and record eligibility.’