The Complaint About a Mis-sold Packaged Account
A customer complains that she was sold a packaged current account with a £15 monthly fee eighteen months ago. She says the branch adviser told her the fee 'paid for itself' through travel insurance and breakdown cover, but she has since discovered the travel insurance excludes her pre-existing medical condition and the breakdown cover only applies to the vehicle named at the time of sale. She has never used either benefit. She wants a refund of all fees paid (£270) plus compensation. The adviser who sold the account has since left the bank. The bank's records show a signed application form but no record of the suitability discussion. The customer is 74 and says she did not fully understand the product. The bank's complaints procedure requires acknowledgement within three working days and a final response within eight weeks.
1. Assess the merits of the complaint and identify the key evidential gaps.
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Merits - the complaint has real strength:
- The signed form alone does not prove suitability. The bank must be able to show the product met the customer's needs and that the exclusions were explained.
- The travel insurance exclusion for a pre-existing condition and the named-vehicle restriction on breakdown cover mean the benefits may not have matched her circumstances - exactly the suitability question the sale should have addressed.
- No record of the suitability discussion is a significant evidential gap; the burden is on the firm to demonstrate it acted fairly.
- Vulnerability indicators - age 74 and a stated lack of understanding - raise the standard of care expected.
- Never used the benefits supports the argument that the product did not meet her needs, though non-use alone is not decisive.
Evidential gaps:
- No suitability record.
- The adviser has left; their account may be unavailable, but the firm remains responsible for its sales.
- No record of what was said about exclusions.
On balance, the complaint is likely to be upheld in part or in full.
2. What redress is appropriate, and how should the bank reason about the amount?
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Reasoning:
- The starting point is to put the customer back in the position she would have been in had the account not been sold.
- Refund of fees: £270 (18 months × £15) is the direct loss and should normally be refunded if the sale is found unsuitable.
- Interest: the customer lost the use of that money; adding interest at an appropriate rate is standard.
- Compensation for distress/inconvenience: a modest additional sum may be appropriate given the vulnerability and the effort of complaining; it should be reasoned, not arbitrary.
- Offset: the bank may consider whether she received any benefit, but given non-use, little or no offset is likely.
What not to do: do not reduce the refund simply because the adviser has left, and do not treat the signed form as closing the matter. The firm is responsible for its advisers' conduct.
The response should be clear, explain the reasoning, and set out how to escalate if she remains dissatisfied.
3. How should the bank handle the timing requirements and the customer's vulnerability?
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Timing:
- Acknowledge within three working days - confirm receipt, the complaint reference, and the expected timeline.
- Final response within eight weeks. If the bank cannot meet this, it must explain why and tell the customer about her right to escalate to the relevant ombudsman/service.
- Keep the customer informed if the investigation slips; silence is itself a complaint-handling failure.
Vulnerability:
- Use clear, plain language and avoid jargon.
- Offer to communicate in her preferred way and, with consent, to deal with a family member or adviser.
- Check whether she needs additional support (e.g. extra time, written summaries).
- Record the vulnerability and the adjustments made.
Handling vulnerability well is both a conduct expectation and a practical protection: a customer who understands the outcome is less likely to escalate, and the record shows the firm treated her fairly.