Co-op Bank / IVA

Curlybing

I am 15 months into an IVA and I have a co-op cash minder account. I am pretty happy with the account but have some worries about the bank itself as publicised recently. Therefore I want to open a new basic bank account with a visa debit and direct debit facility, also one that is on the high street and does not charge a monthly fee.

I understand that co-op and Barclays are the recommended accounts for people in an IVA and here lies my problem. Barclays are one of my creditors.

I tried to open a basic account with Natwest but they ran a credit check which of course I failed. Every high street bank seems to run a credit check despite some of them advertising that they only run identity checks. Can anyone help me please as I feel like I am running out of options here :mad:

I don't want the world, just a basic bank account, surely it's not too much to ask...

UpToMyNeckInIt

Personally, I wouldn't fret about the Co-Op (I've got an account with them myself).

Even if they did go belly-up (which they might, but only if we all desert them), all funds up to around £65,000 are protected by the Financial Services Compensation Scheme.

as they are about the only IVA-friendly high street bank, personally I think they deserve our custom.

There are a number of card-based accounts: CashPlus, Think Money & ClearCash for example. But, they all charge fees (£10-15pcm), and are not covered by the FSCS (although will presumably be otherwise insured).

The only other 'bank' that will provide a basic account that I am aware of is 'Secure Trust Bank'. Again it's a fee-charger (£12.50pcm), but this can be off-set to some degree: they run a cash-back scheme (3-4% with several large participating retailers), and even pay a small amount of interest. I've got an account with them, and personally recommend them: Very good telephone, internet and mobile phone banking, and they won't let you go overdrawn. nor will you incur fees for stopped direct debits etc.

cheesedoffwithdebt

HI-I thought the FSCS was now £85K? well as far as we are concerned it is anyway- however there is an alternative, which is a company called Cashplus. I have a prepaid card with them which I use to set aside my petrol money, I am always trying new ways of budgetting and managing my money so don't try and work it out!

But Cashplus offer the same facilities as a bank, with direct debits, the ability to pay your wages into there, and a debit card. They don't offer a cheque book but anyway- might be worth a try to check out their site? As they are not offering any credit they don't run credit checks.

What gets me with the banks though is that anyone with an IVA is not asking for an overdraft, as you say, just a basic bank account. I believe the real reason is they cannot make any money out of you unless you borrow so we are no fun to them.

Hope you get on ok anyway, my concern about relying on the financial services compensation scheme is simply that ok, if a bank went under, you would have to wait for some time to recover your money. So although the scheme is there the practicalities might not be so attractive.

cheesedoffwithdebt

PS_ I didn't pay a fee to Cashplus- but it may be different if you have a proper current account type arrangement.

RupertTheCat

I wouldn't worry about the Co op either. I've been with them for 15 years and they're fine, most banks have problems. As you're in an IVA it's not as if you have any savings to lose!

Lloyds have a basic account you can get if you're in an IVA I think. It gives you online banking and a debit card. It's alright. Their online banking is better than the Co-op, though they have a habit of randomly logging you out. They also don't use card readers to set up new online payments which is also useful!

UpToMyNeckInIt

...Lloyds are now not IVA friendly (so so I have read on another IVA forum).

As has been said previously, most of the 'high street' banks now refuse even basic bank accounts to customers subject to BR/DRO or IVA.

Curlybing

I had a bank account with Secure Trust Bank as when I took out my IVA, Debtfree Direct kind of made it sound like I had to bank with them. I used the account for a month and once I realised I could use the Co-op, I transferred. It drove me potty using the pre-load master card.

It kind of irritated me that DFD were using every trick in the book to get me to save money or pay every spare penny I had into the IVA, yet they were happy for me to throw away £12.50 a month for a facility I could get for free.

I am happy with my little Co-op account, it does excatly what is says on the tin! I am just concerned that it may go belly up and then I really will be stuck. I hope I am worrying about nothing.

I count down each month until I am debt free

headstuckinsand

I wouldn't worry about co-op's future - in my mind Co-op are one of the few ethical banks out there and they showed good financial sense in pulling out of the deal to buy Lloyds branches. It's no different to what those of us in IVAs have to do all the time...

...I want those 600+ branches but do I really need them?!

They've quite wisely chosen to look after their own finances rather than being pressured to help the government by buying Lloyds branches.

Jamie-c-smith

Just reading through everyone's posts and am dumbfounded as we have been in an IVA for 2 yeses now and we received a letter from the bank to say they were closing it as we have breached the terms and conditions by one direct debit not being payed back in the summer! We have until the 27 to sort out a new account.
They have cancelled all our direct debits and we are now having to pay them manually. We've tried a few banks and been declined.
Just trying Santander just waiting for reply.
The payment should have gone out the say before I got payed, we got charged for it anyhow and now that's all the thanks we get.
Please don't trust them .
No one is safe with them so just a warning to all be vigilant.

Curlybing

Jamie are you a co-op customer? I went to the Natwest this week to try and open a basic bank account. I explained my situation and was very honest in my reason to want to close my co-op account (seriously worried about them going belly up:( )I was refused even a basic bank account with Natwest because the IVA shows as bankruptcy on their system.

Interestingly and even more worryingly I have got a co-op shop loyalty card and I got a letter from them yesterday to say that no customers will be receiving anything from their loyalty scheme because they ran at a loss...

UpToMyNeckInIt

...Yes, High street options are very thin on the ground.

Yes, CoOp will close your account in certain circumstances. I understand they operate a '3-strikes and you're out' policy for bounced cheques, unauthorised overdraft etc.

Some people think that as far as CoOp is concerned that there is no need to worry (and I sincerely hope that is the case). I remember the same reassurances that there was 'no need to worry' back in 2008 about: HBOS, Northern Rock and Bradford & Bingley - and look what happened to them!!!

But Co-Op having to close 15% of their branches has to tell you something. Do therefore look for a fall-back account somewhere, just in case.

Have heard that Santander, Barclays and Yorkshire BS do an IVA-friendly basic account. Your alternative is a local credit union.

Failing that, you have the fee-charging accounts. I have a Secure Trust account, and I think it is pretty good.

The Monthly fee with Secure Trust (& many of the other card-based accounts) can be allowed for in your IVA expenses, and you can off-set it to some degree by taking advantage of the cash-back offers. 3% cash-back at ASDA - after the weekly shop, I more than cover the £12.50 monthly fee.

I would also choose 'Secure Trust' over the other 'card based' accounts: ST is a proper 'bank', and therefore fully protected by the FSCS. The card accounts: CashPlus, ClearCash etc. good as they may be, are not afforded the same level of FSCS reassurance.

Remembering to top-up the pre-paid mastercard is a pain, but can be done by txt when needed - and the funds are loaded instantaneously. My only gripe is that it is not accepted at some 'pay at pump' fuel stations, and my local NCP car park machine spits it back at me as well.

Hope you find this information useful.