Did Halifax mis-sell your packaged bank account?

Halifax sold packaged bank accounts — primarily the Ultimate Reward Current Account — to millions of customers from 2001 onwards. The account carries a monthly fee (currently £17, historically between £12 and £17.50) in exchange for bundled benefits including worldwide travel insurance, AA breakdown cover, mobile phone insurance, and home emergency cover.

Halifax is part of Lloyds Banking Group and was subject to the same FCA obligations as Lloyds Bank under BCOBS 5.1.6R. In many cases, Halifax customers were not properly informed about the monthly fee, could not use the bundled insurance, or were not told that a free account was available.

Grounds for complaint against Halifax

  • You were not clearly told you were paying a monthly fee when the Ultimate Reward account was opened
  • Your account was upgraded from a free Halifax Reward account without your knowledge or consent
  • You were not informed that Halifax's free Reward Current Account was available as an alternative
  • You were told you did not qualify for a free account when you were eligible
  • The bundled travel insurance was unsuitable — you were ineligible to claim due to age limits, pre-existing medical conditions, or country restrictions
  • The AA breakdown cover did not apply to your vehicle or circumstances
  • You tried to downgrade or close the account and were pressured to keep it

Halifax travel insurance age limits. The travel insurance bundled with the Ultimate Reward account historically excluded customers over 70 (later raised to 80 for some conditions). If you were sold the account when you were approaching or over the age limit, or if you had a pre-existing medical condition that was not disclosed, you have a specific additional ground of complaint under ICOBS 2.5.1R.

The FCA rules Halifax was required to follow

BCOBS 5.1.6R — Halifax was required to communicate clearly and fairly about the monthly fee, the nature of the benefits, the eligibility requirements, and the availability of free alternatives. A failure to disclose any of these clearly is a direct breach of this rule.

ICOBS 2.5.1R — Halifax was required to ensure that bundled insurance products — travel, breakdown, mobile, home emergency — were suitable for your demands and needs. Where a customer could not claim on the insurance provided, the product should not have been sold.

Consumer Duty (PS22/9) — Halifax, as part of Lloyds Banking Group, is required from July 2023 to deliver good outcomes and avoid foreseeable harm across the product lifecycle. This obligation reinforces complaints about accounts that were originally sold without proper disclosure and continue to charge monthly fees.

What redress can you claim?

  • Full refund of all monthly fees paid since the account was opened, confirmed from Halifax's own records
  • Statutory interest at 8% per annum on each monthly fee from the date it was deducted to the date of repayment
  • Compensation for distress and inconvenience as a standalone head of redress, separate from the fee refund

A customer who has paid £17 per month since 2005 will have paid over £4,000 in fees before interest. With 8% statutory interest applied to each individual monthly fee, the total redress can substantially exceed the headline fee figure.

How to make a formal complaint to Halifax

Your complaint must be in writing to trigger Halifax's obligations under DISP 1 of the FCA's Dispute Resolution sourcebook. A verbal complaint to a branch or by telephone does not carry the same weight.

Send your complaint letter by post to:
Head of Customer Services
Halifax
Leeds
LS78 1LB

Send by recorded delivery and keep your proof of postage — this is your evidence that Halifax received the complaint and starts the 8-week response clock.

Subject line:
Formal Complaint — Mis-sold Packaged Bank Account

Your letter should clearly state:

  • That this is a formal complaint under FCA rules
  • The account name (Ultimate Reward Current Account) and the period it was held
  • The specific grounds for your complaint
  • The FCA obligations Halifax failed to meet — BCOBS 5.1.6R as a minimum
  • All three heads of redress you are claiming
  • That you will refer to the FOS if not resolved within 8 weeks

Request the sale documentation. Halifax holds all records relating to the original account opening and any subsequent upgrades. Under FCA rules, the burden of demonstrating appropriate sale rests with Halifax. Asking them to provide documentation of the original sale strengthens your complaint and puts the evidential burden where it belongs.

What happens after you complain?

Halifax must issue a final response to your complaint within 8 weeks of receipt. During this period they may uphold, partially uphold, or reject your complaint, or issue a holding letter if they need more time.

Note your 8-week deadline from the date Halifax receives your complaint. We recommend sending by email so you have a clear timestamp.

If Halifax rejects your complaint or does not respond

If Halifax rejects your complaint, makes an offer you consider insufficient, or fails to respond within 8 weeks, you have the right to refer to the Financial Ombudsman Service.

You must refer within 6 months of Halifax's final response. If Halifax does not respond within 8 weeks, you can refer without waiting.

financial-ombudsman.org.uk
0800 023 4567 (free from UK landlines and mobiles)

The FOS is free and independent. The Financial Ombudsman upholds around 37% of packaged bank account complaints brought directly by consumers — versus 27% when brought through claims companies. You do not need a solicitor or claims management company to refer to the FOS. ClaimsDraft can help you draft the FOS referral letter for £29 if Halifax rejects your initial complaint.

Before you accept any offer from Halifax

Before accepting any redress offer from Halifax, verify it includes all three heads:

  • A full refund of all fees paid — confirmed against Halifax's own records, not your estimate
  • 8% statutory interest on each individual fee from the date it was deducted
  • A separate payment for distress and inconvenience — this should not be absorbed into the fee refund

If any element is missing from Halifax's offer, write back specifically identifying what is absent and requesting it be included. If Halifax refuses to improve the offer, refer to the FOS for an independent assessment of whether the offer is fair.