the co-operative bank - uk parliament · the co-operative bank our customer-led ethical policy...
TRANSCRIPT
The co-operative bank
Liam Coleman Deputy Chief Executive The Co-operative Bank
Miller Street Manchester
M600AL
20 July 2016
Rt Hon Andrew Tyrie MP Chair Treasury Committee House of Commons London SW1AOAA
Dear Mr Tyrie
Re Current account charges
Thank you for your letter dated 5 July 2016 regarding The Comiddotoperative Banks current account overdraft charges Niall Booker Chief Executive of The Co-operative Bank has asked me to reply on his behalf Please find background on our overdraft proposition and answers to the Commtttees specific questions below
The Co-operative Bank provides a full range of banking products and services to around 4 million retail and SME (Small and Medium Sized Enterprises) customers The Bank is committed to values and ethics in line with the principles of the co-operative movement We are the only high street bank with a customer-led ethical policy which gives our customers a say in how their money is used Launched in 1992 the policy has been updated on five occasions with new commitments added in January 2015 to cover how the Bank operates its business products and services workplace and culture relationships with suppliers and other stakeholders and campaigning A copy Is enclosed for your information
I would like to begin by welcoming the Committees decision to examine the fees and charges of overdraft facilities offered to retail banking customers The Co-operative Bank recognises that while authorised and unauthorised overdrafts are a convenient and often vital facility used by millions of customers each day it remains difficult for customers to identify their costs and compare their different fees and charges and exercise choice in a competitive market As a challenger bank wdh a proud history of tnnovaUon we look forward to supporting the Commitlees work to improve competition in retail banking
Although the Bank supports the CMAs review of the Personal Current Account Market and looks forward to considering its final conclusions we are disappointed in their analysis of the relative cost of overdrafts Our analysis shows we have one of the most competitive overdrafts on the market but this is not reflected in the CMAs analysis As we continue to challenge its findings and call for greater transparency of its methodology we urge the Committee to treat the CMAs analysis with a degree of caution
We llke our communications to have an impact on you - but nol on the environment Thi~ clt-cment is p11ned using vegotablo oil based nks on paper whtch s Forot Stawardship Counc en fied and nad01n an elemental chlo11r1e-free proce Im not hnishod bull please recycle me
The co-operative bank
Our customer-led Ethical Policy commits the Bank to working with its customers to develop new products and services and in April 2015 we launched a new overdraft for our Co-operative Bank and Smile current accounts The design or our new overdraft was guided by research with our customers those of other banks and consumer group Which We found that customers wanted an overdraft that offered simplicity fairness and transparency as well as features such as a maximum cap on charges and an unauthorised overdraft buffer
The overdraft offers a clear simple and transparent charging structure that makes borrowing cheaper for all of our customers It is designed to put customers in control of their finances and to work with the grain of their behaviour as we believe customers should not be penallsed for small mistakes or occasionally slipping into a debit position
We abolished our unpaid Item fee which alongside our pound20 buffer and discretionary waiver helps customers who occasionally use an informal overdraft We also lowered our industryshyleading quarterly cap on charges as opposed to the industry norm of a monthly cap to pound60 and reduced our informal charge lowering the overall cost of unauthorised borrowing The table below sets out an overview of our fees and charges and contrasts this with our previous overdraft proposition
Waiver
Debit interest
Six days return to agreed limit once a ear 189 EAW
pound15 fee abolished Reduced from pound20 Reduced from pound150 er uarter Retained Retained
Retained -quivalent Annual Rate
In addition to the information provided above I include on a separate page the answers to your specific questions in relation to our Co-operative Bank and Smile current accounts Please also find attached a table that summarses how our overdraft charges appJy to our heritage student and basic bank account products
I hope the Information above demonstrates our commitment to clear and transparent fees and charges for our customers If you would like any further Information please do not hesitate to contact me
ism Coleman Deputy Chief Executive The Co-operative Bank
Enc The Co-operative Bank summary of overdraft fees and charges Copy of our Ethical Policy part of the Articles of Association of the Co-operative Bank
The~Barks ~bytie Pndnlial Regilalrlnoltlhlrit aniragJa~byhFrarciaf Ctrold ~ aoolh9 Fll$llial Aei)ielrln~ (llaquo)121885) ~kgtthtLerdgCooeanldifnancalQrbuismari SeMe anI IS fcnedtJ tieCffiampolFat T001JJgtbJl06110) RegislirroOllemiddotThe~ralileflnplc flOBol( 1011 BatiMSlleetMandtesleJM00-4EP Rigamp3rronEngam ampWalls ft 99Cro7
r MIX __ FSC -_ _ FSC-COOS244
We like our communicetlons lo have an impact on you - but not on the environment This document is p11nled using vege1abl1t oilmiddotbasoo inks on paper wll1h rs Fomst SIAwardsh1pCourie I cetitied agtd made in an elomental chlo11ne -lrea process Im not linished bullplease ~cyclo me
The co-operative bank
Answers to the Committees Questions
1 What is the daily charge for a customer using an overdraft
For an authorised overdraft we charge a debit interest rate of 189 EAR and as a result the amount a customer pays is dependent on the size of their overdraft facility In the table below we have calculated how much our overdraft would charge customers in comparison to other high street lenders demonstrating the low cost of our proposition Please note that the competitor examples have been sourced from a Moneyfacts news article published on 13th July 2016
Cost of authorised borrowing of pound300 for 15 consecutive days
Natwest
Classic
Select Account pound845
Barcia Bank Account pound1125
Halifax Current Account pound1500
Santander 123 Current Account pound1500
Source Moneyfacts news 131716
2 Is there a cap on the charge incurred by a customer using an authorised overdraft If so what is the maximum charge that a customer can incur in any week month or year
There are no charges tor authorised borrowing apart from debit interest of 189 EAR As the charges for an authorised overdraft are based on their debit balance we do not have a maximum cap However the example provided in our answer to question one demonstrates a typical example of the costs a customer could incur
3 What is the daily charge for an unauthorised overdraft
The charge is pound10 up to a maximum of pound60 per quarter plus a debit Interest rate ot 189 EAR Please note this charge is only applied each day the unauthorised balance increases
4 Is there a cap on the charge incurred by a customer using an unauthorised overdraft If so what is the maximum charge that a customer can incur in any week month or year
Yes A customer in an overdraft will incur a daily charge of pound1 O if their unauthorised overdraft balance increases up to a maximum of pound60 per quarter or pound240 per annum However we charge a debit interest rate of 189 EAR and as a result the amount a customer pays on top of the daily charge fees is dependent on the size of their overdraft facility _ Coltlpllaliie 0arK autatsoolry he f1ri 1iaJ Regltallll Mllriyenard ~~ by1ho F~elCltnbtAuhllitf ard1he Pnden1ial PegillbIMlmf (tb 21800)Slbrobesri teLGrdlgCOOampard1te Fll1lRbl ortu1sten SllMraquo arosbr68l11 tie Oli$ ofFar Traoog(Ngtoc61iOJ AegmrrlClral TheOgtqiel1ltw8anllt pie roeox101 18ooSllool ~til04EP~cdn~ tWales~ lt1YfJJ7
MIX FSC ___-vJ __ -- F8CCOD5244
We like our communications to have an impact on you - but not on th1 environment Th (1ocirnonl is pr1111111111~ino vogolhlA orlmiddothsoo inks 011 rnfgtP1 wlmiddotirh is Fnrnsl Siflwil1dsh1p rounc ceilifoltl and mado in an elem~ntal rhlo1inomiddotlian p1ocoss m no lin1shLgtd - ploase 1rcy middotlr mI
The co-operative bank
5 Are any other costs incurred by a customer using an unauthorised overdraft compared to an authorised overdraft - such as additional fees or interest rates
A customer will incur a pound1 omonthly charge which is applied once per charging period when a customer uses an unauthorised overdraft This fee is included in our pound60 quarterly cap As part of our new overdraft proposition we scrapped our annual service fee and unpaid item lee so that customers now only incur a single capped charge for thelr unauthorised overdraft in addition to an 189 EAR on their unauthorised debit balance
In the table below we have calculated how much our overdraft would charge customers in comparison to other high street lenders demonstrating the low cost of our proposition Please note that the competitor examples have been sourced from a BBC News article published on 13th July 2016 featuring analysis by consumer group Which
Cost of unauthorised borrowing of pound100 for 28 consecutive days
Santander pound6700 TSB pound8000
HSBC pound8000
Lio ds pound8000
RBS pound9000
Source BBC news Bll16
6 What action does Co-operative Bank take - if any - when a customer enters into an unauthorised overdraft
When a customer enters an unauthorised overdraft we try to reach them by telephone the same day to let them know that daily or monthly charges may apply Customers are encouraged to credit their account or contact us if they are experiencing financial difficulties Where a customer returns to their formal position within six days we may waive the charges though the debit interest still applies
For customers who do not quickly return to their formal position or in credit our customer contact centres have an agreed 45-day contact strategy which includes outbound telephone calls letters and text messages
The~ lwk ilauhned by tw Fluilolial Regjatilrl -Umriti am regJa~ by tie Fnaraii ClmJcAufort ard te Ftliioolial PogallloftaJXlf ~ 12181fi)~blraquolordrrlCltdlard tte FIWICIIII01mosrna11~alkl1S~17fm Ola oFar Trdig (N006 1~ P191s11Jsd OwThe ~ ampie~ Sllt FO Box1011 Bilbln$1eel MarlclAAI ~ 4EP~0011 ~ ampWallslb ~ l
r Mlgtltyl __ We like our communlcAlions to have an impact on you - but not on the environm(nl r~ document s pltnlod using VfJ90tllblo 01lmiddotbased 111ks on pape wimiddotich 1s Foresl St0wa1rlsh1p t uric I c011ili~danrl made in an elornental clilo1111e -lre0 process Im not hnished - pleas cycle meFSC-- ---shyF6CCOCS24
The Co-operative Bank summary of overdraft charges 15Juy2016
On Sate Products Back Book Products bull No longer on sale Co-operative Bank
Co-operative Bank amp Co~peratlve Bank Prtvllege Privilege Premier ampTSC Questions Cashmlnder ~rativa BankStudent smlle Studentamlkl Currant Account Cunent Account Plus smllemora AccountBasic Bank Account
Authorised overdrafts greater than Authorised overdrafts greater than the Authorised overdrafts greater than Daily charge for a customer using an NA Authorised overdrafts are charged Authorised overdrafts are charged 1 the interest free limit are charged Interest free limit are charged debit the interest free limit are charged authorised overdraft (Overdraft not available) debit interest at 189 EAR debit Interest at 189 EARdebit interest at 9 9 EAR debit interest at 99 EARinterest at 159 EAR
Cap on the charge incurred by a NIA
2 customer using an authorised NIA NIA NIA NIA NIA(Overdraft not available) overdraft
pound10 (applied each subsequent day the pound10 (applied each subsequent day the pound10 (applied each subsequent day the Daily charge for an unauthorised NA ~ unauthorised overdraft balance NA unauthorised overdraft balance unauthorised overdraft balance NIAoverdraft (Overdraft not available)
increases in a charging period) Increases In a charging period) Increases in a chanilng period)
Cap of pound60 per quarter on daily and Cap of pound60 per quarter on daily and Cap of pound60 per quarter on daily and Cap on the charge incurred by a NIA monthly unauthorised overdraft monthly unauthorised overdraft monthly unauthorised overdraft 4 customer using an unauthorised NIA NIA(Overdraft not available) charges (cap does not include debit charges (cap does not include debit charges (cap does not Include debit
overdraft interest) Interest) Interest)
pound 10 monthly charge (applied once per pound1 Omonthly charge (applied once per pound10 monthly charge (applied once per Any other costs incurred by a charging period when a customer uses charging period when a customer uses charging period when a customer uses customer using an unauthorised NA an unauthorised overdraft) Debit interest charged at 189 an unauthorised overdraft) Debit Interest charged at 189an unauthorised overdraft) 5
EAR for an unautholised overdraft overdraft
(Overdraft not available) EAR for unautholised overdraft overdraft compared to an authorised Debit interest charged at 189-gt EAR Debit Interest charged et 189 EAR Debit interest charged et 189 EAR
for an unauthorised overdraft for an unauthor1sed overdraft for an unauthorised overdraft
A letter is sent to the customer when unautholised monthlydaily charges are incurred by a customer warning them that they are using an unauthorised overdraft and charges will apply Customers are encouraged to credit their account or contact us if they are experiencing financial difficulties
Action taken when a customer enters NA6
(Overdraft not available) into an unauthorised overdraft For customer who do not quickly return to their formal position or in credit our customer contact cenlres have an agreed 45-day contact strategy which includes outbound telephone calls letters and text messages
Supporting Information
Unpiad item fees were removed by the Bank Sth April 2015
pound20 buffer - customers can use an unauthorised overdraft of up to pound20 without incurring any monthlydaily charges but debit interest applies
Annual waiver - the first time a customer uses an unauthorised overdraft of greater than pound20 in a 12 month period if the account is put back into credit within 6 days we will waive any monthlydaily unauthorised overdraft charges Debit interest still applies
Interest free overdraft limits
Account Type Interest Free Limit
Privilege Account Up to pound200
Privilege Premier Up to pound300
smile more Up to pound260 Yr 1- Up to pound1400
Student Current Account Yr 2 - Up to pound1700 Yr 3+ - Up to pound2000 Yr 1 - Up to pound1000
smile Student Current Account Yr 2- Up to pound1400 Yr 3 - Up to pound1800
Yr 4+ - Up to pound2 000
The co-operative bank
Our customer-led Ethical Policy commits the Bank to working with its customers to develop new products and services and in April 2015 we launched a new overdraft for our Co-operative Bank and Smile current accounts The design or our new overdraft was guided by research with our customers those of other banks and consumer group Which We found that customers wanted an overdraft that offered simplicity fairness and transparency as well as features such as a maximum cap on charges and an unauthorised overdraft buffer
The overdraft offers a clear simple and transparent charging structure that makes borrowing cheaper for all of our customers It is designed to put customers in control of their finances and to work with the grain of their behaviour as we believe customers should not be penallsed for small mistakes or occasionally slipping into a debit position
We abolished our unpaid Item fee which alongside our pound20 buffer and discretionary waiver helps customers who occasionally use an informal overdraft We also lowered our industryshyleading quarterly cap on charges as opposed to the industry norm of a monthly cap to pound60 and reduced our informal charge lowering the overall cost of unauthorised borrowing The table below sets out an overview of our fees and charges and contrasts this with our previous overdraft proposition
Waiver
Debit interest
Six days return to agreed limit once a ear 189 EAW
pound15 fee abolished Reduced from pound20 Reduced from pound150 er uarter Retained Retained
Retained -quivalent Annual Rate
In addition to the information provided above I include on a separate page the answers to your specific questions in relation to our Co-operative Bank and Smile current accounts Please also find attached a table that summarses how our overdraft charges appJy to our heritage student and basic bank account products
I hope the Information above demonstrates our commitment to clear and transparent fees and charges for our customers If you would like any further Information please do not hesitate to contact me
ism Coleman Deputy Chief Executive The Co-operative Bank
Enc The Co-operative Bank summary of overdraft fees and charges Copy of our Ethical Policy part of the Articles of Association of the Co-operative Bank
The~Barks ~bytie Pndnlial Regilalrlnoltlhlrit aniragJa~byhFrarciaf Ctrold ~ aoolh9 Fll$llial Aei)ielrln~ (llaquo)121885) ~kgtthtLerdgCooeanldifnancalQrbuismari SeMe anI IS fcnedtJ tieCffiampolFat T001JJgtbJl06110) RegislirroOllemiddotThe~ralileflnplc flOBol( 1011 BatiMSlleetMandtesleJM00-4EP Rigamp3rronEngam ampWalls ft 99Cro7
r MIX __ FSC -_ _ FSC-COOS244
We like our communicetlons lo have an impact on you - but not on the environment This document is p11nled using vege1abl1t oilmiddotbasoo inks on paper wll1h rs Fomst SIAwardsh1pCourie I cetitied agtd made in an elomental chlo11ne -lrea process Im not linished bullplease ~cyclo me
The co-operative bank
Answers to the Committees Questions
1 What is the daily charge for a customer using an overdraft
For an authorised overdraft we charge a debit interest rate of 189 EAR and as a result the amount a customer pays is dependent on the size of their overdraft facility In the table below we have calculated how much our overdraft would charge customers in comparison to other high street lenders demonstrating the low cost of our proposition Please note that the competitor examples have been sourced from a Moneyfacts news article published on 13th July 2016
Cost of authorised borrowing of pound300 for 15 consecutive days
Natwest
Classic
Select Account pound845
Barcia Bank Account pound1125
Halifax Current Account pound1500
Santander 123 Current Account pound1500
Source Moneyfacts news 131716
2 Is there a cap on the charge incurred by a customer using an authorised overdraft If so what is the maximum charge that a customer can incur in any week month or year
There are no charges tor authorised borrowing apart from debit interest of 189 EAR As the charges for an authorised overdraft are based on their debit balance we do not have a maximum cap However the example provided in our answer to question one demonstrates a typical example of the costs a customer could incur
3 What is the daily charge for an unauthorised overdraft
The charge is pound10 up to a maximum of pound60 per quarter plus a debit Interest rate ot 189 EAR Please note this charge is only applied each day the unauthorised balance increases
4 Is there a cap on the charge incurred by a customer using an unauthorised overdraft If so what is the maximum charge that a customer can incur in any week month or year
Yes A customer in an overdraft will incur a daily charge of pound1 O if their unauthorised overdraft balance increases up to a maximum of pound60 per quarter or pound240 per annum However we charge a debit interest rate of 189 EAR and as a result the amount a customer pays on top of the daily charge fees is dependent on the size of their overdraft facility _ Coltlpllaliie 0arK autatsoolry he f1ri 1iaJ Regltallll Mllriyenard ~~ by1ho F~elCltnbtAuhllitf ard1he Pnden1ial PegillbIMlmf (tb 21800)Slbrobesri teLGrdlgCOOampard1te Fll1lRbl ortu1sten SllMraquo arosbr68l11 tie Oli$ ofFar Traoog(Ngtoc61iOJ AegmrrlClral TheOgtqiel1ltw8anllt pie roeox101 18ooSllool ~til04EP~cdn~ tWales~ lt1YfJJ7
MIX FSC ___-vJ __ -- F8CCOD5244
We like our communications to have an impact on you - but not on th1 environment Th (1ocirnonl is pr1111111111~ino vogolhlA orlmiddothsoo inks 011 rnfgtP1 wlmiddotirh is Fnrnsl Siflwil1dsh1p rounc ceilifoltl and mado in an elem~ntal rhlo1inomiddotlian p1ocoss m no lin1shLgtd - ploase 1rcy middotlr mI
The co-operative bank
5 Are any other costs incurred by a customer using an unauthorised overdraft compared to an authorised overdraft - such as additional fees or interest rates
A customer will incur a pound1 omonthly charge which is applied once per charging period when a customer uses an unauthorised overdraft This fee is included in our pound60 quarterly cap As part of our new overdraft proposition we scrapped our annual service fee and unpaid item lee so that customers now only incur a single capped charge for thelr unauthorised overdraft in addition to an 189 EAR on their unauthorised debit balance
In the table below we have calculated how much our overdraft would charge customers in comparison to other high street lenders demonstrating the low cost of our proposition Please note that the competitor examples have been sourced from a BBC News article published on 13th July 2016 featuring analysis by consumer group Which
Cost of unauthorised borrowing of pound100 for 28 consecutive days
Santander pound6700 TSB pound8000
HSBC pound8000
Lio ds pound8000
RBS pound9000
Source BBC news Bll16
6 What action does Co-operative Bank take - if any - when a customer enters into an unauthorised overdraft
When a customer enters an unauthorised overdraft we try to reach them by telephone the same day to let them know that daily or monthly charges may apply Customers are encouraged to credit their account or contact us if they are experiencing financial difficulties Where a customer returns to their formal position within six days we may waive the charges though the debit interest still applies
For customers who do not quickly return to their formal position or in credit our customer contact centres have an agreed 45-day contact strategy which includes outbound telephone calls letters and text messages
The~ lwk ilauhned by tw Fluilolial Regjatilrl -Umriti am regJa~ by tie Fnaraii ClmJcAufort ard te Ftliioolial PogallloftaJXlf ~ 12181fi)~blraquolordrrlCltdlard tte FIWICIIII01mosrna11~alkl1S~17fm Ola oFar Trdig (N006 1~ P191s11Jsd OwThe ~ ampie~ Sllt FO Box1011 Bilbln$1eel MarlclAAI ~ 4EP~0011 ~ ampWallslb ~ l
r Mlgtltyl __ We like our communlcAlions to have an impact on you - but not on the environm(nl r~ document s pltnlod using VfJ90tllblo 01lmiddotbased 111ks on pape wimiddotich 1s Foresl St0wa1rlsh1p t uric I c011ili~danrl made in an elornental clilo1111e -lre0 process Im not hnished - pleas cycle meFSC-- ---shyF6CCOCS24
The Co-operative Bank summary of overdraft charges 15Juy2016
On Sate Products Back Book Products bull No longer on sale Co-operative Bank
Co-operative Bank amp Co~peratlve Bank Prtvllege Privilege Premier ampTSC Questions Cashmlnder ~rativa BankStudent smlle Studentamlkl Currant Account Cunent Account Plus smllemora AccountBasic Bank Account
Authorised overdrafts greater than Authorised overdrafts greater than the Authorised overdrafts greater than Daily charge for a customer using an NA Authorised overdrafts are charged Authorised overdrafts are charged 1 the interest free limit are charged Interest free limit are charged debit the interest free limit are charged authorised overdraft (Overdraft not available) debit interest at 189 EAR debit Interest at 189 EARdebit interest at 9 9 EAR debit interest at 99 EARinterest at 159 EAR
Cap on the charge incurred by a NIA
2 customer using an authorised NIA NIA NIA NIA NIA(Overdraft not available) overdraft
pound10 (applied each subsequent day the pound10 (applied each subsequent day the pound10 (applied each subsequent day the Daily charge for an unauthorised NA ~ unauthorised overdraft balance NA unauthorised overdraft balance unauthorised overdraft balance NIAoverdraft (Overdraft not available)
increases in a charging period) Increases In a charging period) Increases in a chanilng period)
Cap of pound60 per quarter on daily and Cap of pound60 per quarter on daily and Cap of pound60 per quarter on daily and Cap on the charge incurred by a NIA monthly unauthorised overdraft monthly unauthorised overdraft monthly unauthorised overdraft 4 customer using an unauthorised NIA NIA(Overdraft not available) charges (cap does not include debit charges (cap does not include debit charges (cap does not Include debit
overdraft interest) Interest) Interest)
pound 10 monthly charge (applied once per pound1 Omonthly charge (applied once per pound10 monthly charge (applied once per Any other costs incurred by a charging period when a customer uses charging period when a customer uses charging period when a customer uses customer using an unauthorised NA an unauthorised overdraft) Debit interest charged at 189 an unauthorised overdraft) Debit Interest charged at 189an unauthorised overdraft) 5
EAR for an unautholised overdraft overdraft
(Overdraft not available) EAR for unautholised overdraft overdraft compared to an authorised Debit interest charged at 189-gt EAR Debit Interest charged et 189 EAR Debit interest charged et 189 EAR
for an unauthorised overdraft for an unauthor1sed overdraft for an unauthorised overdraft
A letter is sent to the customer when unautholised monthlydaily charges are incurred by a customer warning them that they are using an unauthorised overdraft and charges will apply Customers are encouraged to credit their account or contact us if they are experiencing financial difficulties
Action taken when a customer enters NA6
(Overdraft not available) into an unauthorised overdraft For customer who do not quickly return to their formal position or in credit our customer contact cenlres have an agreed 45-day contact strategy which includes outbound telephone calls letters and text messages
Supporting Information
Unpiad item fees were removed by the Bank Sth April 2015
pound20 buffer - customers can use an unauthorised overdraft of up to pound20 without incurring any monthlydaily charges but debit interest applies
Annual waiver - the first time a customer uses an unauthorised overdraft of greater than pound20 in a 12 month period if the account is put back into credit within 6 days we will waive any monthlydaily unauthorised overdraft charges Debit interest still applies
Interest free overdraft limits
Account Type Interest Free Limit
Privilege Account Up to pound200
Privilege Premier Up to pound300
smile more Up to pound260 Yr 1- Up to pound1400
Student Current Account Yr 2 - Up to pound1700 Yr 3+ - Up to pound2000 Yr 1 - Up to pound1000
smile Student Current Account Yr 2- Up to pound1400 Yr 3 - Up to pound1800
Yr 4+ - Up to pound2 000
The co-operative bank
Answers to the Committees Questions
1 What is the daily charge for a customer using an overdraft
For an authorised overdraft we charge a debit interest rate of 189 EAR and as a result the amount a customer pays is dependent on the size of their overdraft facility In the table below we have calculated how much our overdraft would charge customers in comparison to other high street lenders demonstrating the low cost of our proposition Please note that the competitor examples have been sourced from a Moneyfacts news article published on 13th July 2016
Cost of authorised borrowing of pound300 for 15 consecutive days
Natwest
Classic
Select Account pound845
Barcia Bank Account pound1125
Halifax Current Account pound1500
Santander 123 Current Account pound1500
Source Moneyfacts news 131716
2 Is there a cap on the charge incurred by a customer using an authorised overdraft If so what is the maximum charge that a customer can incur in any week month or year
There are no charges tor authorised borrowing apart from debit interest of 189 EAR As the charges for an authorised overdraft are based on their debit balance we do not have a maximum cap However the example provided in our answer to question one demonstrates a typical example of the costs a customer could incur
3 What is the daily charge for an unauthorised overdraft
The charge is pound10 up to a maximum of pound60 per quarter plus a debit Interest rate ot 189 EAR Please note this charge is only applied each day the unauthorised balance increases
4 Is there a cap on the charge incurred by a customer using an unauthorised overdraft If so what is the maximum charge that a customer can incur in any week month or year
Yes A customer in an overdraft will incur a daily charge of pound1 O if their unauthorised overdraft balance increases up to a maximum of pound60 per quarter or pound240 per annum However we charge a debit interest rate of 189 EAR and as a result the amount a customer pays on top of the daily charge fees is dependent on the size of their overdraft facility _ Coltlpllaliie 0arK autatsoolry he f1ri 1iaJ Regltallll Mllriyenard ~~ by1ho F~elCltnbtAuhllitf ard1he Pnden1ial PegillbIMlmf (tb 21800)Slbrobesri teLGrdlgCOOampard1te Fll1lRbl ortu1sten SllMraquo arosbr68l11 tie Oli$ ofFar Traoog(Ngtoc61iOJ AegmrrlClral TheOgtqiel1ltw8anllt pie roeox101 18ooSllool ~til04EP~cdn~ tWales~ lt1YfJJ7
MIX FSC ___-vJ __ -- F8CCOD5244
We like our communications to have an impact on you - but not on th1 environment Th (1ocirnonl is pr1111111111~ino vogolhlA orlmiddothsoo inks 011 rnfgtP1 wlmiddotirh is Fnrnsl Siflwil1dsh1p rounc ceilifoltl and mado in an elem~ntal rhlo1inomiddotlian p1ocoss m no lin1shLgtd - ploase 1rcy middotlr mI
The co-operative bank
5 Are any other costs incurred by a customer using an unauthorised overdraft compared to an authorised overdraft - such as additional fees or interest rates
A customer will incur a pound1 omonthly charge which is applied once per charging period when a customer uses an unauthorised overdraft This fee is included in our pound60 quarterly cap As part of our new overdraft proposition we scrapped our annual service fee and unpaid item lee so that customers now only incur a single capped charge for thelr unauthorised overdraft in addition to an 189 EAR on their unauthorised debit balance
In the table below we have calculated how much our overdraft would charge customers in comparison to other high street lenders demonstrating the low cost of our proposition Please note that the competitor examples have been sourced from a BBC News article published on 13th July 2016 featuring analysis by consumer group Which
Cost of unauthorised borrowing of pound100 for 28 consecutive days
Santander pound6700 TSB pound8000
HSBC pound8000
Lio ds pound8000
RBS pound9000
Source BBC news Bll16
6 What action does Co-operative Bank take - if any - when a customer enters into an unauthorised overdraft
When a customer enters an unauthorised overdraft we try to reach them by telephone the same day to let them know that daily or monthly charges may apply Customers are encouraged to credit their account or contact us if they are experiencing financial difficulties Where a customer returns to their formal position within six days we may waive the charges though the debit interest still applies
For customers who do not quickly return to their formal position or in credit our customer contact centres have an agreed 45-day contact strategy which includes outbound telephone calls letters and text messages
The~ lwk ilauhned by tw Fluilolial Regjatilrl -Umriti am regJa~ by tie Fnaraii ClmJcAufort ard te Ftliioolial PogallloftaJXlf ~ 12181fi)~blraquolordrrlCltdlard tte FIWICIIII01mosrna11~alkl1S~17fm Ola oFar Trdig (N006 1~ P191s11Jsd OwThe ~ ampie~ Sllt FO Box1011 Bilbln$1eel MarlclAAI ~ 4EP~0011 ~ ampWallslb ~ l
r Mlgtltyl __ We like our communlcAlions to have an impact on you - but not on the environm(nl r~ document s pltnlod using VfJ90tllblo 01lmiddotbased 111ks on pape wimiddotich 1s Foresl St0wa1rlsh1p t uric I c011ili~danrl made in an elornental clilo1111e -lre0 process Im not hnished - pleas cycle meFSC-- ---shyF6CCOCS24
The Co-operative Bank summary of overdraft charges 15Juy2016
On Sate Products Back Book Products bull No longer on sale Co-operative Bank
Co-operative Bank amp Co~peratlve Bank Prtvllege Privilege Premier ampTSC Questions Cashmlnder ~rativa BankStudent smlle Studentamlkl Currant Account Cunent Account Plus smllemora AccountBasic Bank Account
Authorised overdrafts greater than Authorised overdrafts greater than the Authorised overdrafts greater than Daily charge for a customer using an NA Authorised overdrafts are charged Authorised overdrafts are charged 1 the interest free limit are charged Interest free limit are charged debit the interest free limit are charged authorised overdraft (Overdraft not available) debit interest at 189 EAR debit Interest at 189 EARdebit interest at 9 9 EAR debit interest at 99 EARinterest at 159 EAR
Cap on the charge incurred by a NIA
2 customer using an authorised NIA NIA NIA NIA NIA(Overdraft not available) overdraft
pound10 (applied each subsequent day the pound10 (applied each subsequent day the pound10 (applied each subsequent day the Daily charge for an unauthorised NA ~ unauthorised overdraft balance NA unauthorised overdraft balance unauthorised overdraft balance NIAoverdraft (Overdraft not available)
increases in a charging period) Increases In a charging period) Increases in a chanilng period)
Cap of pound60 per quarter on daily and Cap of pound60 per quarter on daily and Cap of pound60 per quarter on daily and Cap on the charge incurred by a NIA monthly unauthorised overdraft monthly unauthorised overdraft monthly unauthorised overdraft 4 customer using an unauthorised NIA NIA(Overdraft not available) charges (cap does not include debit charges (cap does not include debit charges (cap does not Include debit
overdraft interest) Interest) Interest)
pound 10 monthly charge (applied once per pound1 Omonthly charge (applied once per pound10 monthly charge (applied once per Any other costs incurred by a charging period when a customer uses charging period when a customer uses charging period when a customer uses customer using an unauthorised NA an unauthorised overdraft) Debit interest charged at 189 an unauthorised overdraft) Debit Interest charged at 189an unauthorised overdraft) 5
EAR for an unautholised overdraft overdraft
(Overdraft not available) EAR for unautholised overdraft overdraft compared to an authorised Debit interest charged at 189-gt EAR Debit Interest charged et 189 EAR Debit interest charged et 189 EAR
for an unauthorised overdraft for an unauthor1sed overdraft for an unauthorised overdraft
A letter is sent to the customer when unautholised monthlydaily charges are incurred by a customer warning them that they are using an unauthorised overdraft and charges will apply Customers are encouraged to credit their account or contact us if they are experiencing financial difficulties
Action taken when a customer enters NA6
(Overdraft not available) into an unauthorised overdraft For customer who do not quickly return to their formal position or in credit our customer contact cenlres have an agreed 45-day contact strategy which includes outbound telephone calls letters and text messages
Supporting Information
Unpiad item fees were removed by the Bank Sth April 2015
pound20 buffer - customers can use an unauthorised overdraft of up to pound20 without incurring any monthlydaily charges but debit interest applies
Annual waiver - the first time a customer uses an unauthorised overdraft of greater than pound20 in a 12 month period if the account is put back into credit within 6 days we will waive any monthlydaily unauthorised overdraft charges Debit interest still applies
Interest free overdraft limits
Account Type Interest Free Limit
Privilege Account Up to pound200
Privilege Premier Up to pound300
smile more Up to pound260 Yr 1- Up to pound1400
Student Current Account Yr 2 - Up to pound1700 Yr 3+ - Up to pound2000 Yr 1 - Up to pound1000
smile Student Current Account Yr 2- Up to pound1400 Yr 3 - Up to pound1800
Yr 4+ - Up to pound2 000
The co-operative bank
5 Are any other costs incurred by a customer using an unauthorised overdraft compared to an authorised overdraft - such as additional fees or interest rates
A customer will incur a pound1 omonthly charge which is applied once per charging period when a customer uses an unauthorised overdraft This fee is included in our pound60 quarterly cap As part of our new overdraft proposition we scrapped our annual service fee and unpaid item lee so that customers now only incur a single capped charge for thelr unauthorised overdraft in addition to an 189 EAR on their unauthorised debit balance
In the table below we have calculated how much our overdraft would charge customers in comparison to other high street lenders demonstrating the low cost of our proposition Please note that the competitor examples have been sourced from a BBC News article published on 13th July 2016 featuring analysis by consumer group Which
Cost of unauthorised borrowing of pound100 for 28 consecutive days
Santander pound6700 TSB pound8000
HSBC pound8000
Lio ds pound8000
RBS pound9000
Source BBC news Bll16
6 What action does Co-operative Bank take - if any - when a customer enters into an unauthorised overdraft
When a customer enters an unauthorised overdraft we try to reach them by telephone the same day to let them know that daily or monthly charges may apply Customers are encouraged to credit their account or contact us if they are experiencing financial difficulties Where a customer returns to their formal position within six days we may waive the charges though the debit interest still applies
For customers who do not quickly return to their formal position or in credit our customer contact centres have an agreed 45-day contact strategy which includes outbound telephone calls letters and text messages
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The Co-operative Bank summary of overdraft charges 15Juy2016
On Sate Products Back Book Products bull No longer on sale Co-operative Bank
Co-operative Bank amp Co~peratlve Bank Prtvllege Privilege Premier ampTSC Questions Cashmlnder ~rativa BankStudent smlle Studentamlkl Currant Account Cunent Account Plus smllemora AccountBasic Bank Account
Authorised overdrafts greater than Authorised overdrafts greater than the Authorised overdrafts greater than Daily charge for a customer using an NA Authorised overdrafts are charged Authorised overdrafts are charged 1 the interest free limit are charged Interest free limit are charged debit the interest free limit are charged authorised overdraft (Overdraft not available) debit interest at 189 EAR debit Interest at 189 EARdebit interest at 9 9 EAR debit interest at 99 EARinterest at 159 EAR
Cap on the charge incurred by a NIA
2 customer using an authorised NIA NIA NIA NIA NIA(Overdraft not available) overdraft
pound10 (applied each subsequent day the pound10 (applied each subsequent day the pound10 (applied each subsequent day the Daily charge for an unauthorised NA ~ unauthorised overdraft balance NA unauthorised overdraft balance unauthorised overdraft balance NIAoverdraft (Overdraft not available)
increases in a charging period) Increases In a charging period) Increases in a chanilng period)
Cap of pound60 per quarter on daily and Cap of pound60 per quarter on daily and Cap of pound60 per quarter on daily and Cap on the charge incurred by a NIA monthly unauthorised overdraft monthly unauthorised overdraft monthly unauthorised overdraft 4 customer using an unauthorised NIA NIA(Overdraft not available) charges (cap does not include debit charges (cap does not include debit charges (cap does not Include debit
overdraft interest) Interest) Interest)
pound 10 monthly charge (applied once per pound1 Omonthly charge (applied once per pound10 monthly charge (applied once per Any other costs incurred by a charging period when a customer uses charging period when a customer uses charging period when a customer uses customer using an unauthorised NA an unauthorised overdraft) Debit interest charged at 189 an unauthorised overdraft) Debit Interest charged at 189an unauthorised overdraft) 5
EAR for an unautholised overdraft overdraft
(Overdraft not available) EAR for unautholised overdraft overdraft compared to an authorised Debit interest charged at 189-gt EAR Debit Interest charged et 189 EAR Debit interest charged et 189 EAR
for an unauthorised overdraft for an unauthor1sed overdraft for an unauthorised overdraft
A letter is sent to the customer when unautholised monthlydaily charges are incurred by a customer warning them that they are using an unauthorised overdraft and charges will apply Customers are encouraged to credit their account or contact us if they are experiencing financial difficulties
Action taken when a customer enters NA6
(Overdraft not available) into an unauthorised overdraft For customer who do not quickly return to their formal position or in credit our customer contact cenlres have an agreed 45-day contact strategy which includes outbound telephone calls letters and text messages
Supporting Information
Unpiad item fees were removed by the Bank Sth April 2015
pound20 buffer - customers can use an unauthorised overdraft of up to pound20 without incurring any monthlydaily charges but debit interest applies
Annual waiver - the first time a customer uses an unauthorised overdraft of greater than pound20 in a 12 month period if the account is put back into credit within 6 days we will waive any monthlydaily unauthorised overdraft charges Debit interest still applies
Interest free overdraft limits
Account Type Interest Free Limit
Privilege Account Up to pound200
Privilege Premier Up to pound300
smile more Up to pound260 Yr 1- Up to pound1400
Student Current Account Yr 2 - Up to pound1700 Yr 3+ - Up to pound2000 Yr 1 - Up to pound1000
smile Student Current Account Yr 2- Up to pound1400 Yr 3 - Up to pound1800
Yr 4+ - Up to pound2 000
The Co-operative Bank summary of overdraft charges 15Juy2016
On Sate Products Back Book Products bull No longer on sale Co-operative Bank
Co-operative Bank amp Co~peratlve Bank Prtvllege Privilege Premier ampTSC Questions Cashmlnder ~rativa BankStudent smlle Studentamlkl Currant Account Cunent Account Plus smllemora AccountBasic Bank Account
Authorised overdrafts greater than Authorised overdrafts greater than the Authorised overdrafts greater than Daily charge for a customer using an NA Authorised overdrafts are charged Authorised overdrafts are charged 1 the interest free limit are charged Interest free limit are charged debit the interest free limit are charged authorised overdraft (Overdraft not available) debit interest at 189 EAR debit Interest at 189 EARdebit interest at 9 9 EAR debit interest at 99 EARinterest at 159 EAR
Cap on the charge incurred by a NIA
2 customer using an authorised NIA NIA NIA NIA NIA(Overdraft not available) overdraft
pound10 (applied each subsequent day the pound10 (applied each subsequent day the pound10 (applied each subsequent day the Daily charge for an unauthorised NA ~ unauthorised overdraft balance NA unauthorised overdraft balance unauthorised overdraft balance NIAoverdraft (Overdraft not available)
increases in a charging period) Increases In a charging period) Increases in a chanilng period)
Cap of pound60 per quarter on daily and Cap of pound60 per quarter on daily and Cap of pound60 per quarter on daily and Cap on the charge incurred by a NIA monthly unauthorised overdraft monthly unauthorised overdraft monthly unauthorised overdraft 4 customer using an unauthorised NIA NIA(Overdraft not available) charges (cap does not include debit charges (cap does not include debit charges (cap does not Include debit
overdraft interest) Interest) Interest)
pound 10 monthly charge (applied once per pound1 Omonthly charge (applied once per pound10 monthly charge (applied once per Any other costs incurred by a charging period when a customer uses charging period when a customer uses charging period when a customer uses customer using an unauthorised NA an unauthorised overdraft) Debit interest charged at 189 an unauthorised overdraft) Debit Interest charged at 189an unauthorised overdraft) 5
EAR for an unautholised overdraft overdraft
(Overdraft not available) EAR for unautholised overdraft overdraft compared to an authorised Debit interest charged at 189-gt EAR Debit Interest charged et 189 EAR Debit interest charged et 189 EAR
for an unauthorised overdraft for an unauthor1sed overdraft for an unauthorised overdraft
A letter is sent to the customer when unautholised monthlydaily charges are incurred by a customer warning them that they are using an unauthorised overdraft and charges will apply Customers are encouraged to credit their account or contact us if they are experiencing financial difficulties
Action taken when a customer enters NA6
(Overdraft not available) into an unauthorised overdraft For customer who do not quickly return to their formal position or in credit our customer contact cenlres have an agreed 45-day contact strategy which includes outbound telephone calls letters and text messages
Supporting Information
Unpiad item fees were removed by the Bank Sth April 2015
pound20 buffer - customers can use an unauthorised overdraft of up to pound20 without incurring any monthlydaily charges but debit interest applies
Annual waiver - the first time a customer uses an unauthorised overdraft of greater than pound20 in a 12 month period if the account is put back into credit within 6 days we will waive any monthlydaily unauthorised overdraft charges Debit interest still applies
Interest free overdraft limits
Account Type Interest Free Limit
Privilege Account Up to pound200
Privilege Premier Up to pound300
smile more Up to pound260 Yr 1- Up to pound1400
Student Current Account Yr 2 - Up to pound1700 Yr 3+ - Up to pound2000 Yr 1 - Up to pound1000
smile Student Current Account Yr 2- Up to pound1400 Yr 3 - Up to pound1800
Yr 4+ - Up to pound2 000
