On 3 July 2015, a special bulletin published by the Ministry of Justice (MoJ) reported a notable increase in activity around claims for mis-sold packaged bank accounts (PBAs). The increase was identified by the MoJ’s Claims Management Regulation Unit (CMR) through work with claims management companies (CMCs), the banks receiving such complaints, the Financial Ombudsman Service (FOS) and consumers.

The bulletin provides clear guidance and highlights the CMR’s areas of concern and some poor practices around CMCs’ handling of PBA complaints.  The key issues of note are:

  • Product Knowledge – A PBA is not the same as a payment protection insurance policy (PPI) and complaints should be treated distinctly. CMCs are expected to understand what rules were relevant to a PBA at the time of sale in order to present a complaint properly.
  • Customer Knowledge – A PBA is often more complex than a PPI policy and a complaint will have more intricacies. CMCs must complete a “fact find” with the customer to establish what it understands the benefits to be, and whether the benefits would have been useful and usable at the time of sale.
  • FOS decisions - CMCs are expected to learn from the PBA complaints process and to assess the chance of a complaint being successful and advise and make recommendations to customers on this basis.  CMCs should avoid referring all rejected cases to the Financial Ombudsman.