Co-op Bank Morally Bankrupt?

Loughton_Monkey

Is everyone else as confused as I on the antics of the Co-op Bank?

They have just withdrawn from the market to offer bank accounts for undischarged bankrupts.

Now whilst I do not personally give a toss, and thought that undischarged bankrupts were not allowed bank accounts by law, I was intrigued by the 'logic'.

http://www.bbc.co.uk/news/business-19637063

On Monday, the Co-op changed its basic Cashminder basic bank account, arguing that all banks should work equally to offer help to those who have been financially excluded.

Now the co-op makes a point about being 'ethical'. Most of us have no love of bankers, but equally have limits on our tolerance of 'ethics' when it hits our pockets. When we invest with, or deal with a bank, we want good service and good products.

But there is a minority of people who love tree hugging, and will only buy products that are organic, sustainable, fair-trade, renewable local produce. Quacks they may be, but they deserve the right to have a bank that pretends to agree with them. This is the co-op's edge. This is their USP. They would be the first to 'gripe' the minute HSBC, Barclays, NatWest, Halifax & Co. all started claiming to be "ethical" in order to pinch business from the Co-op?

But here they are. Being "ethical" by offering a product in demand by bankrupts. The minute they realise [the bl**ding obvious] that 'ethics' cost money, they claim foul and hide the ball until all the other banks chip in and help the poor.

I class this behaviour as equally intolerable as the huge bonuses paid to loss-making hedge fund monkeys. I class it as unethical.

Next thing, they'll be bleating about refusing to avoid investing in oil companies (or whatever) until all the other major banks do it.

In short, a very curious corporate logic - or lack of it.

michaels

A basic bank account can not go overdrawn = no overdaft charges, and none of the banks want this business...why could that be?

Graham_Devon

Loughton_Monkey wrote: »

In short, a very curious corporate logic - or lack of it.

The Co-Op itself isn't very ethical on a lot of the products it offers. It's banking arm however recently (by that I mean some months ago) decided to make a point about ethics, while withdrawing funding from FTB's to channel it into their BTL investment arm.

They also had issues with farmers etc, paying them less than the large 4 supermarkets. They ditched their local veg suppliers in favour of foreign suppliers to save costs for the customer and then put the costs up on the same products. They got cosy with councils to impose a co-op on every single one of us, pricing out local independants and so on.

The ethical part seems to literally be a hangover of what they set up to be. Theres not much of it left anymore, but I guess it's a slogan they want to hang on to. Don't see them as any different to Tesco's in all honesty....bar smaler stores.

And their "special offers" are just laughable. Robinsons squash, 1 litre, BOGOF on offer for £2.80 for example. I get the leaflets through the door, and they literally and quite blatantly pretty much double the price on most products and offer it as BOGOF. BOGOF on mens roll on deodrant....suddenly Sure roll ons are £4.30 each, but on speical offer. The leaflets and deals always amuse me.

olly300

I've had personal experience of the Co-Op's "ethics" in the insurance market and their "co-operation" with the FOS.

Luckily the more "unethical" underwriter decided that co-operating with the FOS was the correct thing to do.

As Graham_Devon pointed out it's just marketing.

You are just as likely to find that companies that don't pretend to be ethical are better in dealing with customers etc particularly when pushed, simply because it helps them increase their sales.

Daedalus

IF only we owned a bank or two and could give them a nudge to offer these basic accounts...

paddyrg

A basic bank account is what you get age 16 - no credit cards, no overdraft, no lines of credit - why should bankrupts trying to find their feet be excluded from direct debits, standing orders etc which will help them re-learn how to manage their money effectively and save them from paying more for not using DD (leccy keys, etc)

DervProf

At least Co-op are gud with fud.

Graham_Devon

DervProf wrote: »

At least Co-op are gud with fud.

I'm somewhat of a connoisseur on this front, being that the co-op is the only place in my local area to go without driving 3 miles!

Their salt and vinegar finest type crisps (large packet) are absolutely awesome. Their fresh baked bread is delicious, so long as you eat the whole loaf within 3 hours of buying it! By the evening it's changed texture completely.

However, that's about it. Everything is is so damn expensive, I don't generally buy their own products unless they are labelled up as the date is up the same day. Tried a Beef Strogonoff the other day. Normally £3.45, reduced to 90p. For 90p it was rather good. If I'd have paid £3.45 for it I'd be mighty dissapointed! It's the same over their entire range. Basically as good as an asda £1.50 ready meal...doesn't even come close to the supermarkets upper class ranges.

They are extremely expensive for what they are, but also, convinient, so I guess you can't expect them to pay high local rates over several stores, and then offer decent products at decent prices.

Stay away from their own sausages. Really strange taste, and the smell when cooking is real offputting!!!

As a sidenote, they appear to be trying to muscle into post offices down here, taking them over, but offering only the higher paying services. Sadly, quite a few post offices have gone to them, reducing the range of services.

kabayiri

Update, spokesman from Co-op just on R5 with Martin, explaining that this removal of BBA action is in effect tactical, and designed to force the hand of the other banks/government to 'do their share'.

You may question the approach, but their complaint about unfair shouldering of the burden seems fair.

Loughton_Monkey

kabayiri wrote: »

....You may question the approach, but their complaint about unfair shouldering of the burden seems fair.

Well I hear what you say.

But the reason I posted originally was that I still think the Co-op are being 'two faced' about this.

1. Yes, we all fully understand that this is not "attractive" business. Given full commercial motives, most banks would not offer these accounts.

2. But the Co-op firmly positions itself - and tries to get a marketing 'edge' - as an ethical bank with a social conscience. Hence it is exactly the sort of thing one would expect them to be proud of.

3. Now it is essentially saying all the other banks don't have a social conscience [which I would have thought is a 'given'] and therefore - on this point - we won't either.

It's a bit like an Insurance Company splashing the media with a message "We are an Insurer who believes in being fair to all drivers, however bad your experience. So if you have just got your license back after a 2 year ban, other companies won't touch you. But we believe in helping you. Come to us for a quote...."

Then, after a couple of years discovering huge losses, change your stance by all means, but don't complain that you are coming out because no other Insurer would agree to go down the same loss-making route.

So it is "fair" for co-op to admit "In this particular case, our ethical stance is costing us too much money. So we will withdraw from this expensive service". But it is pure cant to say "Our ethical stance is costing us money. Because no other bank is prepared to be as stupid, we are withdrawing..."

kabayiri

LM, I can't say I side with Co-op particularly, but it may bring the issue to a head, and if it leads to wider support for people who need these sort of accounts I can live with the approach. They have enough hurdles to cope with. I can't imagine life without banking facilities.