Forum Home» Budgeting & Bank Accounts

MSE News: Co-op blocks bankrupts from bank accounts

New Post Advanced Search

MSE News: Co-op blocks bankrupts from bank accounts

edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
22 replies 4.1K views
Former_MSE_HelenFormer_MSE_Helen
2.4K posts
edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
"The Co-op Bank stops offering basic bank accounts to undischarged bankrupts, leaving Barclays as the only provider ..."
«13

Replies

  • 4$£&*(£$&*(!4$£&*(£$&*(! Users Awaiting Email Confirmation
    999 posts
    This is a terrible move by Co-Op Bank and one that I feel is sure to leave already vulnerable people that bit more worse off.

    They say the Cashminder account is costing them money. In banking there are loss leaders and highly profitable banks too. I feel all banks should be forced to offer a wide range of accounts instead of picking and choosing what customers they want.

    Add onto that the pittance paid on some of their products - I used to bank with Smile up until about 3 years ago when I woke up and realised what poor rates I got (a distant cry from the highly touted market leading rates when I opened my account shortly after Smile launched). I have to ask - just how ethical are Co-Op Bank with this latest move? It's all well and good them wanting us to think they are ethical, particularly with their marketing material - but do their actions speak louder than words?
  • myth123myth123 Forumite
    312 posts
    Tenth Anniversary 100 Posts Combo Breaker
    ✭✭
    So if individuals switch bank accounts and open cashminder prior to petitioning their account will remain open?
  • edited 17 September 2012 at 6:20PM
    premierfellapremierfella Forumite
    866 posts
    Part of the Furniture Combo Breaker
    ✭✭✭
    edited 17 September 2012 at 6:20PM
    I've been both a critic and a supporter of Co-op moves in the past in relation to its banking service, but I think the article probably very fairly reflects the Co-op's position and, in this case, I think they are sincere in their intentions and doing the right thing (even to the longer-term benefit of undischarged bankrupts).

    They have been a "go-to" bank for basic bank accounts for years, and I think it is generally accepted that basic bank accounts are unprofitable (not necessarily an issue for the Co-op, but clearly one it has to be very aware of as it impacts their standard bank account customers who would be subsidising it).

    Only the Co-op and Barclays were prepared to offer basic bank accounts to undischarged bankrupts. Co-op has no way of getting other banks to do the same. Its only leverage to achieve that aim is to force a position where no-one offers undischarged bankrupts basic bank accounts (i.e. an equitable position). I think it is safe to assume that Barclays will follow the Co-op's move in due course now that they are the last bank standing.

    This leaves open two options - either the government sits back and decides that the Post Office card account is sufficient provision for this sector of the market (possible) or (more likely) it steps in and forces all banks to provide some sort of basic bank account service to these customers. If the latter happens (as I'm sure the Co-op Bank assumes) undischarged bankrupts may end up being better off as they'll have a wider selection of banks to choose from than they currently have, and the Co-op won't be carrying the burden unduly for the others.
  • Any reason for duplicating a thread Helen?

    http://forums.moneysavingexpert.com/showthread.php?t=4183387

    Because she's a moderator and can do what she like.
  • tgroom57tgroom57 Forumite
    1.4K posts
    Tenth Anniversary 1,000 Posts Name Dropper
    ✭✭✭
    Maybe I read it wrong, but I thought it said the Co-op blocks bankrupts from opening (new) accounts. Doesn't spell out what happens if a bankrupt person already has a Co-op account.
    I can think of only a few reasons where someone in this position would want to open a new account, and none of those reasons are noble.

  • innovateinnovate
    16.2K posts
    ✭✭✭✭✭
    From the the BBC article
    It said existing customers in this situation would not be affected.
  • One thing to note which hasn't (as far as I can see) been mentioned ... internet banking

    Co-op offers internet banking to undischarged bankrupts

    Barclays refuse internet banking to undischarged bankrupts

    When someone has been made bankrupt they are in the worst financial position possible - they need to be able to see every penny (yes, voice of experience talking). To not be able to see what's going in/out on a daily basis can lead to huge problems. Not everyone lives near a cashpoint to get a print-out or balance (it's an hour's round trip for me - no public transport either).

    When asked Barclays said "sorry, it's just our policy" - that's just not good enough, there's nothing dodgy that can be done with a basic account; it just means that you feel even more like a leper :(
  • samasama wrote: »
    One thing to note which hasn't (as far as I can see) been mentioned ... internet banking

    Co-op offers internet banking to undischarged bankrupts

    Barclays refuse internet banking to undischarged bankrupts

    When someone has been made bankrupt they are in the worst financial position possible - they need to be able to see every penny (yes, voice of experience talking). To not be able to see what's going in/out on a daily basis can lead to huge problems. Not everyone lives near a cashpoint to get a print-out or balance (it's an hour's round trip for me - no public transport either).

    When asked Barclays said "sorry, it's just our policy" - that's just not good enough, there's nothing dodgy that can be done with a basic account; it just means that you feel even more like a leper :(

    Did I then read this wrong when you quoted'when someone is made bankrupt they are in the worst financial position' you sure about that I would say your probably in a better financial position then many people being free of debt or have I missed something.
  • JuicyJesusJuicyJesus Forumite
    3.8K posts
    Tenth Anniversary 1,000 Posts Combo Breaker
    ✭✭✭✭
    samasama wrote: »
    When asked Barclays said "sorry, it's just our policy" - that's just not good enough, there's nothing dodgy that can be done with a basic account; it just means that you feel even more like a leper :(

    There is a lot dodgy that can be done with a basic bank account. Clearing cycle fraud and money laundering spring rapidly to mind.
    urs sinserly,
    ~~joosy jeezus~~
This discussion has been closed.

Quick links

Essential Money | Who & Where are you? | Work & Benefits | Household and travel | Shopping & Freebies | About MSE | The MoneySavers Arms | Covid-19 & Coronavirus Support