Lloyds banks packaged account refund

CDB199

You’re gonna have to pardon my ignorance here - but I Hadn’t realised the whole issue with being missold packaged bank accounts. I have had a Lloyds premier account with all the “free” perks that come with it for 10 years now. I rarely use the account or check for movements - just have a 10K plus balance (As advised) to maintain the insurance, breakdown cover etc.
upon checking Last week, I find I have been given a refund of some £1500. I assume for being missold?

whilst being delighted to receive this - am I being paid off here? Or is this a standard amount? Can I challenge it or is this a good amount. Have read the mse pages on this and the option to claim no win no fee but Lloyds have not contacted me- simply paid this into my current account: any advice what to do other than just be thankful and move on?

eskbanker

The first obvious thing to do is to contact Lloyds and ask them what the money is for and how they've calculated it.  

The second obvious thing to do is to evaluate whether it makes sense for you to be paying them a monthly fee for an account that you rarely use but tie up significant funds in - you're absolutely right to use the inverted commas around "free" when you're forking out a sizable sum for the perks.  Even if you feel that a packaged bank account is the most cost-effective means of obtaining the various insurances, there are likely to be various options cheaper than Lloyds's £28 per month, if that's what you're paying.

However, the fact that these accounts are often poor value for money doesn't necessarily mean that you've been missold, especially if you're fully aware that you're paying monthly fees that you don't need to - if you only use this account rarely then you're presumably using a free account for your day-to-day banking?

CDB199

Find it strange Lloyds haven’t communicated- simply transferred the money on to my balance. I only did an hours read that so can only assume this is why I’ve received it.

Whilst I’ve not paid a single £28 monthly fee as the balance has Always been 10K+ the opportunity cost of using that money to gain interest elsewhere I’d suggest is somewhere near the price and time to source and pay for the insurances and cover.
the account was used as a secondary current acc up until 2 yrs ago, just used to having it and the balance that is there.

my main query really is have I been paid correctly? Not gonna lie, delighted to receive but can’t find much online about how much I should be getting? Too much/little.

eskbanker

If there's an option to avoid monthly fees by keeping £10K in there then this does indeed change the economics, but conversely means that there'd be nothing to reimburse if there was misselling involved, which is typically the only reason for reimbursement - on what basis would you say there could have been any misselling?

Maybe you'll get posters with first-hand knowledge of such rebates on this old niche account, but as above to me the first port of call is to ask Lloyds what it's for and how it's been calculated, or are you perhaps not wanting to draw their attention to this in case it's to your advantage to let sleeping dogs lie?

CDB199

In a way, yes. Don’t want to make a fuss when happy with the payment which has come out of the blue to me. 

Ideally want some feedback from others who have experience in this form of rebate and suggest if under my circumstances I have been reimbursed relatively well in comparison to any industry standard. Sure, I’ve said I’m happy - but If the par was Different I’d be interested to know.
thanks for feedback btw, eskbanker.

eskbanker

As I understand it, the norm when quantifying misselling cases is to reimburse losses incurred, which will typically involve refunding monthly fees, plus some interest, so, once misselling was identified, it would normally be a case of working out the consequent financial losses, rather than using a fixed figure.  In your circumstances I can't see how anyone could have come up with a figure if there aren't any apparent losses?

happy_hazelnuts

would lloyds is any case reimburse when a claim for mis-selling hasn't even been lodged? i would be surprised if true.

are you sure that's what the money is for. 1500 seems a nice round figure. If it is for mis-selling are you sure it is meant for you?

CDB199

this figure was rounded for simplicity.
ive decided to call them and find out. Doesn’t sit perfectly with me regardless  and would rather know how they’ve come to the total

Neil49

You can't argue that it has been missold given that they send out a letter annually asking you to check that it is suitable for your purposes and, if not, to contact them and amend or cancel it. 

First step is to contact them and find out what the refund relates to. 

bonkersbonkers1

The £10k for free Premier suggests the OP is  a Private Banking customer.
If this is the case the monthly fee is waived if a cleared balance of £10k is held.