DRN-3189483
The complaint
Mr K has complained that Lloyds Bank PLC mis-sold him two packaged bank accounts. The
first was called a Gold account and the second a Platinum account. Lloyds charged Mr K
monthly fees for these accounts and provided several potential benefits in return. Mr K thinks
that Lloyds should refund him all the fees he paid and add interest.
What happened
Mr K has banked with Lloyds for quite a long time. Lloyds has checked its records for him
and has told us that his account history is as follows:
in or around 1995, he opened a fee-free account, which he kept until 2008,
in September 2008, Lloyds sold him the Gold account, which replaced his fee-free
account and for which it charged a monthly fee,
in January 2012, Lloyds sold him the Platinum account, which replaced his Gold
account and for which it charged a higher fee,
in March 2016, Lloyds sold him additional features for his Platinum account, known as
Club Lloyds (*),
in December 2019, Mr K went back to a fee-free account, but retained the Club Lloyds
features, although I’m not sure if he still has them.
(*) Club Lloyds was an extra package available to Lloyds customers with various types of
account, including those with no monthly fee. The features varied from time-to-time but
included potential benefits such as cinema tickets or magazine subscriptions. Lloyds
sometimes charged a monthly fee for this package. But the fee was quite a bit smaller than
for either the Gold or the Platinum accounts and Lloyds would waive it for customers who
deposited more than a certain amount into their account each month.
Similarly, at some stages, both Mr K’s Gold account and his Platinum account had the
additional designation of Vantage. Again, this designation was available to customers with
various types of account. To qualify, customers had to meet certain banking criteria, but
Lloyds did not usually charge a monthly fee. The designation entitled customers to receive
interest on their current account. Lloyds withdrew the Vantage designation from all its
customers, including Mr K, during February-March 2016.
This account history is not in dispute and I have taken it to be accurate.
One of our adjudicators has already looked into Mr K’s complaint. The adjudicator thought
that Lloyds had behaved fairly when it sold him the packaged accounts and the Club Lloyds
features.
The adjudicator didn’t recommend that Lloyds should give Mr K any money back. Mr K
didn’t agree with the adjudicator’s findings and asked for an ombudsman to review his
complaint. So, it has come to me to make a final decision.
What I’ve decided – and why
I’ve considered all the available evidence and arguments to decide what’s fair and
reasonable in the circumstances of this complaint.
We’ve explained how we handle complaints about packaged bank accounts on our
website, and I’ve used this approach to help me to decide what to do about Mr K’s
complaint. I’ve looked into everything that Mr K and Lloyds have told us or sent us about
the case, and I’ve decided not to uphold it. I’ve explained why below.
Mr K and Lloyds have both told us that Lloyds advised him to buy both the Gold and the
Platinum accounts. As Lloyds gave him advice, to do things fairly in each case, I would
have expected it to give him a choice, tell him about the accounts’ costs and benefits and
check that the accounts were reasonable matches for his needs.
Although Mr K has made similar points about the way Lloyds sold him the Gold and the
Platinum accounts, as they were clearly separate events, I have considered them
separately. Similarly, I have also considered the way it sold him the Club Lloyds features
separately. Mr K has said very little about the Vantage designation and as Lloyds did not
charge him any fees for this, there is little of substance for me to investigate with respect
to potential mis-selling. I have not considered it any further.
The way Lloyds sold Mr K the Gold account
Both Lloyds and Mr K have told us that Lloyds sold him the Gold account during a meeting at
one of its branches. Mr K has told us that Lloyds misled him into thinking that he had to buy
the Gold account as Lloyds was planning to withdraw his fee-free account. In
correspondence with us, he said “The fact is I only took out the Gold account because I was
informed by Lloyds they were changing all accounts to become fee paying.....”. Lloyds has
denied saying this.
Obviously, I wasn’t present at the meeting, so I can’t tell for sure what Lloyd said, or didn’t
say, to Mr K. I accept that Mr K is doing his best to remember what happened back then, but
I doubt that Lloyds misled him in the way he has described. Lloyds was not withdrawing fee-
free accounts. It has continued to provide them quite widely, as have other UK banks. It
seems highly unlikely to me that it would have told Mr K the opposite. By that time Mr K had
held a fee-fee account for at least ten years and I don’t think it would have been credible for
Lloyds to tell him he couldn’t keep it. I accept that Lloyds may well have spoken positively
about the Gold account, but I think it probably allowed Mr K a choice to keep his fee-free
account.
From what Mr K has told us, there is no dispute that Lloyds told him about the fees for the
Gold account. And I also think it’s highly likely that it told him about the potential benefits.
After all, it was trying to sell the Gold account to him and it was in its own interest to let him
know what he could get in return for his monthly fees. Indeed, Mr K went on to use some of
the benefits and has acknowledged that he knew about them.
In 2008, the benefits of the Gold account included insurance for travel and mobile phones
and use of a car breakdown service. Lloyds also usually charged customers with Gold
accounts less interest on overdrafts than it applied to customers with fee-free accounts.
I understand that Mr K had a mobile phone, travelled from time-to-time, and used a car. He’s
also told us that he was interested in using an overdraft. So, he seems to have had a
potential need for at least some of the Gold account’s benefits. I think it was reasonable for
Lloyds to advise him to buy it.
The way Lloyds sold Mr K the Platinum account
Mr K and Lloyds have both said that Lloyds sold him the Platinum account during a phone
call. Mr K has told us that Lloyds said he couldn’t keep the Gold account any longer. In
correspondence with us, he said Lloyds “informed (him that his) Gold account was basically
defunct and (he) had to choose a different account and (the Platinum account) was the
cheapest one on offer..”.
Once again, I can’t tell for sure what Lloyds said, or didn’t say, to Mr K over the phone. Mr K
has suggested we ask Lloyds for a recording of the call, which we have done, but Lloyds
hasn’t been able to find one. However, in 2012, Lloyds wasn’t withdrawing the Gold account.
In 2013, it stopped selling it to new customers, but still provided it to customers who had
bought it previously. It’s still available to those customers today. So, I doubt it told Mr K the
account was defunct and he couldn’t keep it. I think it’s more likely that it allowed him a
choice between the Gold and Platinum accounts. And for similar reasons to those I
mentioned above, I also doubt that it denied him the option to have a fee-free account.
There is no dispute that Lloyds told Mr K about the higher fees for the Platinum account.
And, for the same reasons as with the Gold account, I also think it’s highly likely that it told
him about the account’s potential benefits.
In 2012, the main potential benefits of the Platinum account were similar to those of the
Gold account. They included travel insurance, use of a car breakdown service and
insurance for mobile phones. However, some of the benefits were more comprehensive.
For example, the car breakdown service had more features than that provided with the Gold
account, and depending on the amount a customer borrowed, overdrafts could be cheaper.
Given Mr K’s circumstances, I think it was reasonable for Lloyds to advise him to buy the
Platinum account. Indeed, he went on to use the additional features of the car breakdown
service, so obviously had a potential need for them.
The way Lloyds sold the Club Lloyds package to Mr K
Although Mr K has complained about the Club Lloyds package, he has not told us a great
deal about it. I have seen an internal note from Lloyds which shows that he usually met the
banking criteria for Lloyds to waive the fee. And Mr K has said that after discussion with
Lloyds it credited him ”every month with the exact same amount (as the fee) so essentially
the account is free”. So, even if Lloyds made mistakes in the way it sold him the package, he
doesn’t seem to have lost out.
My final decision
For the reasons I have set out above, I am not upholding Mr K’s complaint about Lloyds
Bank PLC. I am not going to tell it to give him any money back.
Under the rules of the Financial Ombudsman Service, I’m required to ask Mr K to accept or
reject my decision before 20 June 2022.
Steve Townsley
Ombudsman
