Co-op Bank not so ethical on Bounce Back Loans?

brickbybrick

I've always run my business via a Co-op Bank current account which prevented me accessing a Bounce Back Loan (BBL) unless I opened a business account. Fair enough, I thought, but after many, many weeks of delays, indefinite phone-holding, and requests for documentation - by which point my earnings had reached zero - I tried Starling, thinking I was going to miss my chance.

Starling made me open a current account first but (as for many) then removed the option to apply for the 'sole trader account' required to access the BBL - looks like a case of boosting new customer numbers (looks good to investors...) with no intention of processing a BBL (www.moneysavingexpert.com/news/2020/06/starling-mse-bounce-back-loans/). So, waste of time: I'll close that next week. At least Tide’s CEO had the honesty to admit they couldn't afford to give out anymore (www.moneysavingexpert.com/news/2020/07/tide-halts-bounce-back-loan-applications---what-you-need-to-know). [Sorry, newbie so can't post active links...]

Now my point... Last autumn, Lloyds Bank agreed with the Competition and Markets Authority (CMA) that it was using anti-competitive practices by forcing existing customers to open business accounts to obtain the BBL. It removed this requirement. A CMA Director said:

"The BBL Scheme is a key part of the support provided by Government to small businesses during the coronavirus (COVID-19) pandemic…Lloyds breached the CMA undertakings it signed...and put their customers at risk of being unnecessarily charged." (www.gov.uk/government/news/cma-stops-lloyds-bundling-business-accounts-with-loans)

So, in this respect, the Co-op Bank is not even operating to the ethical standards of Lloyds, Barclays, HSBC & co. As far as I know, all BBL providers have now shut their doors to new customers, so the Co-op is my only chance to fairly access this support. Work in the pipeline and happy to pay it back...

Anyway, just in case the Co-op Bank CEO browses MSE Forum...you never know..?!

k12479

brickbybrick said:

I've always run my business via a Co-op Bank current account....

Where were your ethics when you decided to use a personal bank account for business use, thus failing to pay your fair share of banking expenses and instead be subsidised by other business banking customers who did pay?

Hypocrisy, is the term.

mattyprice4004

Moral of the story - don’t be a cheapskate and pay what you should be for the services you’re using 

brickbybrick

Brilliant. Just the kind of constructive comments I was looking for on my first post! Well done both, you've really improved the world today for the little guy.

You're maybe right on one thing; poor opening sentence... For clarity, as a sole trader, when I started out scraping paint off  someone's woodwork, I already had a current account so asked them to pay my ten quid into that.

I use the account to receive BACS payments and have no debt facility; hardly 'subsidised'. The Government (and MSE, www.moneysavingexpert.com/banking/business-bank-account/) state that you do not need a business bank account as a sole trader, and that you can use your personal bank account for all business transactions (because your personal and business income is treated as one by HMRC).

sheramber

But you donl't bank with  the Government, MSE or HMRC.
You bank with the COOP who say
 The Co‑operative Bank included, do not allow personal current accounts to be used for business purposes.
https://www.co-operativebank.co.uk/business/products/current-accounts

brickbybrick

And the help keeps rolling in...

I think the point I was trying to make was if the Competition and Markets Authority says that Lloyds forcing existing customers to open a business account to obtain the BBL is anti-competitive, then shouldn't that be a standard the Co-op might adopt? And if Lloyds can quickly change their requirements to better serve existing customers, then couldn't the Co-op do the same?

noitsnotme

brickbybrick said:

And the help keeps rolling in...

I think the point I was trying to make was if the Competition and Markets Authority says that Lloyds forcing existing customers to open a business account to obtain the BBL is anti-competitive, then shouldn't that be a standard the Co-op might adopt? And if Lloyds can quickly change their requirements to better serve existing customers, then couldn't the Co-op do the same?

Maybe if the Competition and Markets Authority say the same about Co-op then they’ll make the change.  I doubt Lloyds would have changed it if they’d hadn’t been singled out.  Come to think of it, why have they singled out Lloyds and no other banks?

brickbybrick

You're likely right, and the Co-op weren't a signatory to this particular anti-competitive standard. Maybe Lloyds owned up first?

Thrugelmir

brickbybrick said:

Brilliant. Just the kind of constructive comments I was looking for on my first post! Well done both, you've really improved the world today for the little guy.

You breached the terms and conditions of your account with the CO-OP by operating it as a business account. Somewhat different to Lloyds who who forcing new business accounts to qualify for a BBL. Your ethics are worse than Lloyds. As you knowingly breached a legal agreement whereas LLoyds simply saw a business opportunity. Which given the national crisis was not appropriate. As there was no requirement to bank with LLoyds to apply for a BBL. 

Little guys become big guys over time. To do so ethics is key. As reputation can take years to build and minutes to destroy. 

Anfieldlad70

sheramber said:

But you don't bank with  the Government, MSE or HMRC.
You bank with the COOP who say
 The Co‑operative Bank included, do not allow personal current accounts to be used for business purposes.
co-operativebank.co.uk/business/products/current-accounts

Funny that when I opened my Personal Account with the Co-op 2 years ago and I sat there in front of their chap and told him I was a taxi driver and need the account to run my business he said - that's fine, we just cannot offer you an overdraft - which I said was fine as I had no need for one.

brickbybrick said:

And the help keeps rolling in...

I think the point I was trying to make was if the Competition and Markets Authority says that Lloyds forcing existing customers to open a business account to obtain the BBL is anti-competitive, then shouldn't that be a standard the Co-op might adopt? And if Lloyds can quickly change their requirements to better serve existing customers, then couldn't the Co-op do the same?

Mate I could not believe it when I saw your post just now - I am in exactly the same boat as you. Bounce Back Loans are not affected by personal or business credit ratings (just what I needed) so I apply for the Business Account to gain access to the BBL - ERRRRG - computer says no, you cannot have a business account due to your credit rating!
Apparently 25% of Sole Traders are in this very situation.
So have I wasted my time applying for a Starling Personal Account?
There must be something that we can access for assistance surely.....

Thrugelmir

Anfieldlad70 said:

sheramber said:

But you don't bank with  the Government, MSE or HMRC.
You bank with the COOP who say
 The Co‑operative Bank included, do not allow personal current accounts to be used for business purposes.
co-operativebank.co.uk/business/products/current-accounts

Funny that when I opened my Personal Account with the Co-op 2 years ago and I sat there in front of their chap and told him I was a taxi driver and need the account to run my business he said - that's fine, we just cannot offer you an overdraft - which I said was fine as I had no need for one.

brickbybrick said:

And the help keeps rolling in...

I think the point I was trying to make was if the Competition and Markets Authority says that Lloyds forcing existing customers to open a business account to obtain the BBL is anti-competitive, then shouldn't that be a standard the Co-op might adopt? And if Lloyds can quickly change their requirements to better serve existing customers, then couldn't the Co-op do the same?

Mate I could not believe it when I saw your post just now - I am in exactly the same boat as you. Bounce Back Loans are not affected by personal or business credit ratings (just what I needed) so I apply for the Business Account to gain access to the BBL - ERRRRG - computer says no, you cannot have a business account due to your credit rating!
Apparently 25% of Sole Traders are in this very situation.
So have I wasted my time applying for a Starling Personal Account?
There must be something that we can access for assistance surely.....

Times change. Onus on banks to report to external bodies for one. This provided an ideal opportunity to kill two birds with one stone.