Packaged Account Fees

[di30]

Re: Packaged Account Fees

When i have 5 i shall post up the letter/email of the Adjudicator's decision received yesterday, just sorting out the loan agreements/statements etc at the moment lol ..

[di30]

Re: Packaged Account Fees

Drat I tried to upload my decision letter received but it will not have it, files too large :-/

[di30]

Re: Packaged Account Fees

Dear

Your Complaint about Lloyds TSB Bank (Lloyds)

I am writing to set out my assessment of this complaint. In reaching my assessment, I have considered all the evidence and documents that you and Lloyds have sent us.

Complaint:
Your account was upgraded to a gold sevice account at some point prior to December 2001. Following this your account was upgraded to a platinum and then premier account. You are unhappy as you stated that these accounts were not suitable for you, and that you were not aware that free options were available.

Circumstances:
Your account was upgraded to a gold service account prior to 2001.

On August 2005, your account was upgraded to a platinum account at your local branch of Lloyds.

On May 2007, your account was upgraded again, this time to a premier account.

In 2009 your account was frozen and transferred to Lloyds DCA.

In August 2005, following the media interest in packaged accounts,you realised that you could have had a free current account. You complained to Lloyds and requested a refund of all the account fees you had paid. You stated that the benefits associated with the accounts had not been suitable foryou, as you had pre-existing medical conditions which would not have been covered under the travel insurance and then did not own mobile phones.

Lloyds responded stating that you drive a car and therefore would have been able to benefit from the breakdown cover provided by the account. It also noted that you had upgraded your accounts numerous times. Lloyds did not uphold your complainty. Dissatisfied with the response you brought your complaint to our service for an independent review.

Findings:
I have carefully considered all of the available evidence and arguments from the outset. In order to decide what is fair and reasonable in the individual circumstances of this case. I have taken into account the law and good industry practice at the time the packaged bank account was sold, and any regulatory rules and guidance relevant to the complaint. In essence, the questions I need to consider in this case are:

. Whether you were given a fair choice about upgrading.
. Whether, in giving advice or recommendation, Lloyds took adequate steps to ensure that any insurance policies it recommended as part of the packaged bank account were suitable for your needs.
. Whether Lloyds gave you information that was clear, fair and not misleading in order to put you back in the position where you could make an informed choice about the packaged account you were buying.

If Lloyds did something wrong when selling the packaged bank account I will then consider whether you have suffered a loss as a result.

Did you consent to the upgrade and did you know that you could have had a free account?

You have said that you agreed to the upgrades; however you have said that this is because you were then under the impression that you had to have a fee paying account.

Lloyds been able to provide me with limited information about the upgrades. You have said that you were not made aware of the free accounts availble to you.

It is not clear exactly when your account was upgraded to a gold service account. Having reviewed the statements you have provided, I can see you were charged a fee of £8 in December 1997 and then later on a fee of £5 in May 2000.

The statements you have provided from 1997 to 2000 are headed up "Lloyds TSB Classic Account" from the Lloyds range. A fee appears on your statements in December 1997 and to May 2000. Therefore whilst I can see you have been charged a fee on these occasions during the 3 year period, I am unable to conclude that this fee was for a packaged account - I find it more likely that this fee was related to an overdraft charge.

As Lloyds has provided me with details of you taking out a gold service loan in January 2001, and you only qualify for a gold service loan if you hold a gold service account, I am persuaded you held a gold service account at that time. The last bank statement you have provided which is headed up as Classic account is dated May 2000. I will therefore proceed on the basis that your account was upgraded to a gold account at some point between May 2000 and January 2001.

In light of the above, I am satisfied that you were aware that free accounts were available to you as you held a fee free account prior to the upgrades. As such I find it unlikely that you were under the impression that you had to have a fee paying account in order to bank with Lloyds. I am therefore persuaded that it is more than not you were given a fair choice about whether or not to upgrade on all three occasions.

Were the sales advised or non-advised?
I have been provided with limited information from the upgrades. You have not said anything to suggest the upgrades were advised - you have said you thought you had to have the various fee paying accounts. This would suggest that the accounts were not only recommended to you, as you have said that they were presented to you as the only options available and the benefits were not discussed in detail.

I will therefore proceed on the basis that the account upgrades were probably non-advised.

As the account upgrades were not advised, Lloyds was not required to establish whether the insurance products were suitable for you. Instead, it was required to provide you with clear, fair and not misleading information about the accounts before you agreed to upgrade. I will assess further whether I consider it met these requirements below.

Were you provided with clear, fair and not misleading information about the accounts?

You have provided me with a copy of pages from the gold service welcome pack which you were sent after your account was upgraded. This pack makes reference to the accountfeee and the associated benefits. On balance I would consider that you were provided with some information about the account at the time it was upgraded as, you had not been, I would have expected you to query this when you received the welcome pack after the upgrade.
You have said that you were made aware of the benefits and of the account fee each time your account was upgraded. This suggests that you did receive some information about the packaged bank accounts but it is possible that your needs were not fully met by Lloyds for example, you may not have been informed about the exclusions and limitations of the insurance products. However, when considering your account has been mis sold, I also need to consider whether you suffered any detriment.

Did you suffer any loss as a result of the potential short comings?

I am persuaded that you were aware that you could have had a free account and instead you chose to take out the packaged account. You have confirmed that you were aware of the account fees and the benefits associated with the account.

Although there may have been some restriction relating to the insurance products which you were not aware of,I note that whilst you held a gold service account you took out two gold service loans. As you had the gold service account, you got these loans at the preferential rate. Furthermore, having reviewed your statements I can see that during the time you held a platinum and premier account you were overdrawn. As a result, you have saved money through having both the accounts as you saved more in overdraft interest through having a preferential overdraft rate than you paid in monthly account fees.

In light of the above, even if there were shortcomings in the way which your accounts were upgraded,based on your actions and your financial circumstances I am not persuaded that you would have done anything differently had you been given all the information. It seems most likely to me that you would have still taken out the packaged account. If you had been properly informed. As a result I am unable to recommend that Lloyds should refund any of the account fees you have paid.

Conclusions:
Because of this, I have to tell you that I am unable to recommend that your complaint should be upheld. I appreciate that this is likely to come as a disappointment to you. I know that this is not the outcome you were hoping for but hope that my explanation has been helpful in setting our clearly why I have taken this view.

However, if you disagree with how I have reached my conclusions, please contact me by 13 November 2013 telling me your reasons and including any evidence that you have not already provided and that you think is important to your case. Please let me know now if you plan to reply in full but you do not think you will be able to meet that deadline.

As we explain in our leaflet, your complaint and the ombudsman, consumers have the right to ask the ombudsman to review their case - as the final stage in our process. But if you do not hear from you by 13 November 2013, we will take it that you have decided not to pursue the complaint further.

Yours sincerely

Adjudicator.

[di30]

Re: Packaged Account Fees

In regards of the above decision made by my adjudicator, there are some misunderstandings!

For one, yes we did have a classic account that entailed service charges back in the 90's, but when it was upgraded to Gold in year 2000 we never had the choice, we were told it was all part of the banking services and that it would be more beneficial for us, not that they did discuss the package or what it entailed and yes we were sent the welcome pack in the post.
Of course back then we were naive and assumed the bank were just looking after us (LOL)!

Another thing as well, because I am not going to lie to them, when the adjudicator emailed us before she made the previous decision of upholding our complaint, she sent us by email attachment a gold service 2003 booklet and we clarified that YES we did have one but not the same benefits were included back in 2001 as it states in her copy she had from Lloyds. (not that they were beneficial to us)!

It does seem that although originally it was upheld in August after her senior colleague helped her with the decision back then, she have since changed her view due to preferential rates but not at all taking into account our reasons etc.

[di30]

Re: Packaged Account Fees

This was the amail received on the 01 Aug just before she originally recommended upholding our complaint........

Dear Mr and Mrs

I am currently reviewing the further information you have provided and hope to discuss your complaint further with a senior colleague within the organisation at some point next week.

I hope to provide you with a more concrete update on whether or not the information you have provided has changed my opinion in two weeks time.

Thank you for your continued patience.

Yours sincerely


Adjudicator
Financial Ombudsman Service
.................................................. .................................................. ....

And on the 13 August 2013........

Dear Mr and Mrs

I can confirm that having reviewed the evidence provided it did persuade me that you were under the impression that you had to pay a fee for your Lloyds TSB account.

I have written to Lloyds TSB explaining this and recommending that the complaint should be upheld. I am waiting to hear whether Lloyds TSB accept my recommendations - if it does not it may provide further information for me to review.

I will update you again once I have received a response from Lloyds TSB.

Thank you for your continued patience.

Yours sincerely


Adjudicator
Financial Ombudsman Service

[EXC]

Re: Packaged Account Fees

In August 2005, following the media interest in packaged accounts,you realised that you could have had a free current account. You complained to Lloyds and requested a refund of all the account fees you had paid. You stated that the benefits associated with the accounts had not been suitable foryou, as you had pre-existing medical conditions which would not have been covered under the travel insurance and then did not own mobile phones.

This implies that you complained in 2005, is that right?

[di30]

Re: Packaged Account Fees

This implies that you complained in 2005, is that right?

Error, it was meant to be 2012 (I had to hand write it all in) lol.

[di30]

Re: Packaged Account Fees

I have forwarded loan agreements to the adjudicator......

Now what would you call preferential? How would we know the difference if there wasnt one?

[di30]

Re: Packaged Account Fees

In June, the adjudicator sent an email to ask this this below......

Having reviewed this welcome pack I note that the gold account provided free extended warranty cover (for appliances costing less than £1,000) and purchase protection for any item purchased with a gold current account card over £50.

Please could you let me know if these benefits would have been of use to you when the account was upgraded. If they would not have been of any use, I would be grateful if you could explain why.

I look forward to hearing from you as soon as possible, and in any event no later than 26 June 2013.

I confirmed that we never actually received those actual details, but did receive welcome pack (that differed to her copy),anyway despite that I did also confirm that we already had that adequate cover and did so with the same covered products all the way to the end of 2003 with Lloyds TSB (separately) but at that time I could not find the details, now today I have found them and thought maybe it was still worth a try on sending the copy.

[di30]

Re: Packaged Account Fees

(sorry i know this thread is getting longer and longer)but I need to make sure that I'm doing everything right, as it may change the views on this before it goes to the Ombudsman.

Right basically I take it that a loan preferential rate should be lower than that of a higher annual percentage rate? is that correct does anyone know please?

For example, 20.00 percentage per annum compared to a 7.9 percentage per annum?

Thanks.

[EXC]

Re: Packaged Account Fees

I have forwarded loan agreements to the adjudicator......

Now what would you call preferential? How would we know the difference if there wasnt one?

I spose it's the difference between the rate you got with the paid for account and a free account but even if the rate was better with the paid for account you'd need to know by what degree in order to establish if you were better off or not.

[di30]

Re: Packaged Account Fees

I spose it's the difference between the rate you got with the paid for account and a free account but even if the rate was better with the paid for account you'd need to know by what degree in order to establish if you were better off or not.

Yes that sounds about right EXC, I just hope the Adjudicator sees it that way as well.

For example, I had a loan a few months down the line (GOLD) service after the gold package was sold to me, the rate of the gold loan was 14.9 Annual percentage rate, £5.500K.

A loan taken out during the Premier period was a loan over £5K at 20.00% per annum (Which I think is high for a premier account package) it says personal fixed rate loan,nothing about it being a special loan.

Yet the loan I had during the classic fee free account in the 90's was at 16.9% per annum percentage, lower than the gold but higher than the premier??
Hmmmmmm:tinysmile_hmm_t2:

[EXC]

Re: Packaged Account Fees

It's difference between rates you got with the paid for accounts and what you would otherwise have got with a free account at a given time because interest rates rise and fall over time.

[di30]

Re: Packaged Account Fees

So in regards of her email yesterday, she states Lloyds was unable to provide her with the details, and I offered last week to send them then (way before a decision was made) so it goes to show she just assumes it would be more preferential without the evidence (that is telling me they trust the banks lol)!

Dear

In answer to your previous question, loan agreements would be helpful in that it will show the rate you received by having the gold account. However Lloyds is unable to provide me with details of the rate you would have had, if you had not held the gold account.

Yours sincerely

Adjudicator

[EXC]

Re: Packaged Account Fees

Indeed!