Co-op Cashminder feedback - Accounts opened AFTER 17th Sept 2012

fermi

As most are probably aware, the Co-op has stopped offering the Cashminder account to undischarged bankrupts as from 17th Sept 2012.

See the press release HERE.

The key statement is:

With immediate effect (from September 17, 2012) the bank is no longer accepting new customers who are un-discharged bankrupts, this decision does not affect the bank's existing customers.

While it is clear from that statement that anyone already declared bankrupt and undischarged will be refused a Cashminder, it leaves a rather obvious loophole or way around the new policy. i.e. that if you are planning to declare yourself bankrupt, then you can open the account prior to the bankruptcy hearing and once bankrupt you will fall in the "exiting customer" category.

If such an obvious way around the new policy is to be allowed without exception, then this basically nullifies the policy change for most practical intents for those looking at bankruptcy.

Now it has been suggested that surely Co-op are not that daft, and that either:

(a) They are aware of of this. They intend this. And it was deliberate in so much that it allows them to keep providing accounts to BRs who think ahead (most I hope), while at the same time allowing them to make their point to the regulators/government on account provision in this area.

or

(b) Not expressed in that press release is a restriction on what they will consider to be "existing customers". In the most extreme case, one could interpret that as customers who had already opened an account before 17th Sept 2012. In other words, customers who open accounts after that date and very shortly after go bankrupt will fall foul of the new policy and have their accounts withdrawn.

Now, I have asked the Co-op press office this question on several occasions, and each time they have not answered the question, produced evasive answers, or just plain failed to respond.

The most they will say is that they have:

Committed to working with existing customers who go bankrupt on an individual basis to find a solution.

Not exactly a reassuring statement. Not even close to "we will not close those accounts". (Although you don't expect a 100% guarantee on all cases)

So we get to the purpose of this thread, which is to record feedback on what happens should anyone here bite the bullet and open a Co-op Casminder account after 17th Sept 2012, but shortly before going bankrupt.

I cannot emphasise enough that if you choose to open the account then you do so at your own risk. Do not consider the account "safe" in any way.

All accounts and experiences are welcome. Please post them below.

Thanks.

Note: Please keep this thread to feedback on your experiences. Discussion of the rights/wrongs of the policy change can be discussed elsewhere.

PippaGirl_2

I had the same problem I wrote asking

There is some confusion as to whether people who will be going bankrupt in the future will still be able to use a cashminder account.

Please could you clarify whether someone could apply for a Cashminder account and run it for a few days or weeks and then go bankrupt and retain it? So they are not bankrupt when they actually apply and open the account but they go bankrupt afterwards?

So this change will only affect the few people who haven't had the foresight to open the cashminder account before going bankrupt?

and the press officer (not sure if I'm allowed to name her so I won't)

replied saying

Thank you for your query.

Just to clarify:

Whilst we are no longer able to accept new customers who are undischarged bankrupts at the point of opening, this decision does not affect the bank’s existing customers. In the event a customer subsequently becomes an undischarged bankrupt, we remain fully committed to working with customers who find themselves in financial difficulty.

Thanks and best wishes,
*

which didn't answer the question at all! I will be interested to see what the answer actually is. My guess is they haven't decided?

IF

Thanks for starting this thread Fermi. Since their statement it has been my worry also. I've had the same reply as you and Pippa.

Part of my email:

What seems to be unclear is whether customers who set up accounts after September 17th then go Bankrupt later is, will they still be able to keep the Cashminder account? So When the OR sends you the form Bank2 option1 and asks for the Cashminder account to remain open will you (Co-op) allow the account to remain open?

Reply :-

Hi there,

Thanks for getting in touch.

We will support customers who already bank with us if they find themselves in financial difficulty. If you need any further information at all then our customer service team should be able to help you on 08457 212 212

PippaGirl_2

If, yours doesn't actually say 'existing customers' as the others do, your term 'customers who already bank with us' I think implies people who open their cashminders before BR will always be ok even after that date of change. Not 100% clear cut though and it seems a deliberate act not to answer the question clearly and one has to ask therefore, there must be some doubt or they would answer the question.

alastairq

Hi, some consideration needs to be given to Co-op's existing policy regarding accounts, where the account holder has petitioned for BR, and the Co-op are a creditor?

I may be wrong here, but have we not had experiences on this forum, whereby BR's who had Co-op as creditors found difficulties retaining an account?


Bearing this scenario in mind, could it explain Co-op's reticence regarding BR, and the wording of the press responses??

In other words, the Co-op do not want to state publicly they are happy with the scenario quoted, since if they are creditors, and withdraw banking services, might not such a public statement backfire on them?


[It still amuses me how the generally accepted opinion of a bankrupt is that 'they are in financial difficulties'...when in fact, they are in financial difficulties [I]before[/I] BR, but once the petition is granted...and subject to the obvious provisos....they cease to be 'in financial difficulties.....?']

1step-at-a-time

I gave the co-op a call on 17th after the press release in somewhat of a panic. I'd opened my account two weeks prior and just transferred all banking to them and explained when opening the reason was pending BR. The lady I spoke to said that as an existing customer I would retain facilities in the event of BR (they are not a creditor) AND more importantly to the point in question when I asked if I opened a second cashminder account with my husband (we aren't actually going to do this as I have decided I don't want him to have any financial association with me as he has a good credit rating etc) would this remain open and was told yes provided it was running prior to my BR. So, based on that, I would assume they are purposefully leaving the loophole there to allow people to open accounts, become an existing customer, and then to go BR. Mind you, this was all verbal and on their telephone banking line, but I do have the details of who I spoke to for my own records just in case.

fermi

1step-at-a-time wrote: »

I gave the co-op a call on 17th after the press release in somewhat of a panic. I'd opened my account two weeks prior and just transferred all banking to them and explained when opening the reason was pending BR. The lady I spoke to said that as an existing customer I would retain facilities in the event of BR (they are not a creditor) AND more importantly to the point in question when I asked if I opened a second cashminder account with my husband (we aren't actually going to do this as I have decided I don't want him to have any financial association with me as he has a good credit rating etc) would this remain open and was told yes provided it was running prior to my BR. So, based on that, I would assume they are purposefully leaving the loophole there to allow people to open accounts, become an existing customer, and then to go BR. Mind you, this was all verbal and on their telephone banking line, but I do have the details of who I spoke to for my own records just in case.

Excellent, please keep us updated on what happens. Although you have been "told" it will be OK, hard experience with banks on these things has shown that only actions count. What you are told over the phone or in branch is frequently wrong. Hopefully not here though.

National_Debtline

Hi fermi

Thank you for starting this thread - we will watch it with interest. As you say, only custom and practice will clarify how Co-Op will address new Cashminder customers who subsequently go BR.

1step-at-a-time

I will know for sure tomorrow ;-) I'm not too worried, they were very clear on the phone that my existing account would be fine. I guess though they can always change their minds! I'm also guessing the main test will be with those who open an account after 17th September and the way it is handled...

1step-at-a-time

Phoned the co-op after the ORs examiner confirmed they were happy for me to use the account and I am fine to continue using my account from the co-op too. I had opened the cashminder on 03rd September so before they changed the rules, but it shows current customers will not have a problem

fermi

Thanks for that, but the real test is still what happens to accounts opened AFTER 17th Sept and shortly after going BR.

Plus it's what happens to the account in the medium term that matters. Not what someone on the phone or in branch tells you.

Classic example of that a few years back was Natwest. People reported that call centre and branch staff were promising that accounts would be OK. Unfortunately when their head office was notified of the bankruptcy, they just shut down accounts regardless of what people had been told.

But that is the point of this thread. To get feedback on what really happens to accounts in the longer term. Hopefully they be OK, but Co-op head office channels have been sufficiently evasive to make it concerning.