CoOp Putting the Boot Into Insolvent Customers

UpToMyNeckInIt

Apologies, I know someone else posted of similar concerns a while back and I was somewhat dismissive.

Received a letter today (as I am sure all customers have/will do soon), with Co-Op's new t'c & c's which will take effect from 16th September (applies to ALL accounts - including Cashminder).

Page 4 of the leaflet adds a new clause 1.7:

'It is a condition of having a bank account with us that you are not made bankrupt or enter into an IVA after you have opened your account. If you are made bankrupt or enter into an IVA after you open an account, this is a serious breach of the terms of this agreement and we can close your account immediately...'

Before anyone jumps down my throat saying it only applies to new customers after 16th September, the wording of the covering letter implies retrospective acceptance of these terms:

'If you do not agree to the changes you can switch or close your account at any time without giving any notice, or paying any charge for closure. If you continue with your account after 16th September, you will be deemed to have accepted these new terms and conditions'.

As a Co-Op customer, I am concerned that they will go all HSBC on us IVA customers and close my account.

Time to start looking for a new account? Worth looking into just in case.

I think CoOp are being very short-sighted given their current financial issues.

Max_Maxwell

Hi UpToMyNeck, I think you're OK. The T&C's are very clear and stipulate that:

'It is a condition of having a bank account with us that you are not made bankrupt or enter into an IVA after you have opened your account'

The covering letter is simply stating that you will be deemed to have accepted these new T&C's if you continue to operate your account after 16th September. As long as you have no plans to go BR then you have nothing worry about. They're using the assumption that if you don't close your account now you've accepted the terms. It's your signature on their dotted line if you like. If you went BR in a year's time they would be within their rights to close your account as you will be deemed to have accepted the new terms by not closing your account when you received the letter.

The below article explains Co op's decision to withdraw its basic bank account from the market. It also makes clear that existing basic account holders will not be affected. It will be a bleak picture for those going BR or IVA after 16th September as Co op will no longer be an option for a basic bank account. Only Barclay's will be offering a basic bank account but at least they have no plans to remove this facility.

http://www.guardian.co.uk/money/2012/sep/18/banks-help-bankrupt-co-op-boss

izools

The good news is though there are plenty of anecdotal reports of those who enter in to DRO or BR with money owed to Barclays / Barclaycard still being permitted to open a Cash Account and not having it closed on them.

Of course if you are having Barclays debt written into any form of insolvency it's important not to open / use the account until after the insolvency order otherwise they will be permitted to use the right of offset against any funds in the account.

UpToMyNeckInIt

Thank you both for your replies.

Max: Yes, that little technicality was not lost on me – I opened my account, after my IVA was agreed, but obviously before my details were put on the insolvency register.

I also posted this on another IVA forum, and have had lots of feedback. It appears that there is a standard covering letter with all accounts , including Cashminder, in the title. However, the enclosed t’s & c’s, booklet you get depends on if like me, you have a standard current account, or any account other than Cashminder.

Cashminder customers aparently get their own specific booklet, where clause 1.7 is not included.

In a nutshell, if you are a Cashminder customer, you should be OK. Any other account, and I guess you could be at risk of being required to close your account, or possibly switch to Cashminder.

Personally, I am going to sit tight and see what happens.

Max_Maxwell

Hi UpToMyNeck

I've received the letter from the Co-operative relating to my the change in terms to my Cashminder account but there is no clause 1.7 on page 4 as you describe above.

My booklet clearly states on the front cover that it is a Guide to Changes for Cashminder account holders. It seems the clause doesn't affect us Cashminder account holders. Sorry to hear it's different for you.

Hoping they'll see there is no sense in closing someone's account when it's being run properly.

Best

Max

alastairq

I agree...Co-op have no intention of ceasing the Cashminder account....and there is no mention of bankruptcy in the T&Cs...

Whatever is referred to, must only apply to Co-op's other current account products....[which would not be allowed whilst undischarged BR anyway, from any sort of bank...as there is implied access to credit.]

The article simply refers to Co-op's policy of not opening a CAshminder account to an Undischarged BR.

This policy has been in situ since last September.

I suggest any doubting thomas's read the post below from Fermi, regarding changes to general banking policy?

https://forums.moneysavingexpert.com/discussion/4718639

This is essentially the reason for Co-op's 'protest' policy regarding opening Cashminder accounts for undischarged BR's.

Note...Cashminder accounts can be opened prior to any BR petition, or IVA.

[Since BR, technically and legally cannot be foreseen....ie they don't happen until the day, on the hour. The only 'planning ahead' lies with the individual researching, receiving advice, and arriving at a decision.]