Packaged bank accounts most complained about product after PPI

Packaged bank accounts have become the most complained about financial product in the UK after PPI.

Latest available figures from the Financial Ombudsman Service (FOS) show 44,244 people complained they had been mis-sold their packaged account in the year to March 2016 – a 107% increase.


As is always the way with FOS figures, this is just a percentage of the total complaints as FOS only handle cases where a complaint has already been rejected by the bank or building society.

It is believed around 10 million packaged accounts have been sold, with fees of up to £25 a month. But consumers are complaining they are paying for features they cannot actually use.

What is a packaged account?

Standard current accounts have no fees attached to them, but packaged accounts charge between £5 and £25 a month for a bundle of extra features. The bundle could include free travel insurance, mobile phone cover and car breakdown assistance.

Some also offer preferential rates on loans and overdrafts, product discounts and even the use of airport lounges.


Such accounts can be a good deal for some bank customers who can use all or most of the added extras. However, many customers have been sold products they already have or are unable to use – effectively being mis-sold the type of account.

Examples quoted include a 73 year old woman who was sold an account with free travel insurance, but the policy had a cut-off age of 70 and she could never have used it. When she complained to the bank the claim was rejected. However, FOS saw it differently and upheld her complaint for mis-selling.

They also upheld a claim by a woman who was sold an account with mechanical breakdown insurance even though she didn’t hold a driving licence.


FOS say the complaints they have received fall into one of six categories in which customers:

  • were pressured into taking out the account
  • didn’t even know they had a packaged bank account
  • were led to believe they had to have this type of account
  • were recommended a type of account which was not suitable for them
  • were not told of the cost of the account or the limitations of the benefits offered
  • were given incorrect information about the account – like it would make them more likely to be approved for a loan


The accounts are often marketed as ‘gold’ or ‘premium’ and cost the consumer between £5 and £25 a month.

All the major banks and building societies have offered them at one time or another in an effort to increase their revenue.

Down the drain

Editor-in-chief of the comparison website, Hannah Maundrell, said: “Anyone who is paying for their bank account should check they are not pouring money down the drain.

“The problem is there are so many people shelling out for perks they either never use, don’t need or cannot claim for.”

Can you claim?

Many people were wrongly told they had to have a packaged account if they wanted an overdraft mortgage or loan. Others weren’t told there was a monthly fee or had their normal free account automatically upgraded.

You might also qualify for a claim if you don’t qualify for one of the account features or you were pushed into signing by the bank staff. You can even claim on an account you no longer have.

Like PPI, not every packaged account was mis-sold, but it’s worth checking to find out.