The consumer advice platform, founded by Martin Lewis, says many people who paid monthly fees for bundled banking perks in past years may have been enrolled under misleading circumstances. In some cases, customers could recover all fees paid, plus interest, potentially amounting to thousands of pounds.
Packaged bank accounts typically charge a monthly fee in exchange for benefits such as travel insurance, mobile phone insurance, or breakdown cover. While these accounts can offer value when chosen knowingly, concerns have persisted for years about the way they were promoted and sold. According to MSE, systemic mis-selling occurred across parts of the banking sector, particularly during periods when sales targets were aggressively pursued.
What Counts as Mis-Selling and Who May Qualify
Mis-selling can take several forms. According to MSE, some customers were told they had no option but to open a packaged account in order to secure a mortgage or an overdraft. Others were reportedly “upgraded” without clear consent, or had fees added without fully understanding the costs involved.
Eligibility issues also feature prominently. Some customers were sold insurance they could not use, for example because of age limits or pre-existing medical conditions. In other instances, account holders were not informed that they needed to register items such as mobile phones or vehicles for coverage to be valid.
MSE states that mis-selling does not only occur at the point of sale. It may also arise later if key conditions were not explained properly, or if price increases were introduced without adequate notification.
Importantly, there is no absolute cut-off on how far back a claim can go. In England and Wales, the statutory limitation period is six years; in Scotland, it is five. Yet according to MSE, older cases can still succeed if the consumer only became aware of the issue more recently and the firm was regulated at the time.
Banks have previously faced regulatory scrutiny over packaged accounts, with the Financial Conduct Authority identifying widespread failings in earlier reviews. That context has made complaints more straightforward in some cases, though outcomes still depend on individual circumstances.
How to Make a Claim and What Compensation May Include
Consumers who believe they were mis-sold are advised to complain directly to their bank. According to MSE, complainants should gather key information before submitting a claim, including their account number, the date the product was opened, the reason for alleging mis-selling, and any relevant statements or documents.
MSE provides a free online reclaim tool and a template letter to assist with the process. If a bank rejects the complaint or fails to respond within eight weeks, customers can escalate the matter to the Financial Ombudsman Service, which will independently review the case.
If a complaint is upheld, customers should receive a refund of all fees paid on the packaged account. For example, someone who paid £15 per month for two years would be entitled to £360 in returned fees. In addition, banks are generally required to add eight percent annual simple interest, reflecting the assumption that the money could have earned returns elsewhere.
MSE cautions that some banks may attempt to resolve disputes by adjusting insurance terms rather than issuing full refunds. It advises complainants to focus on the period during which they were paying for coverage they could not use.
