back to article Co-op Bank up for sale while customers still feel effects of its creaking IT

A "For Sale" sign went up outside the troubled Co-operative Bank this morning, weeks after the cash-strapped lender said it was unable to raise required funds. But while the bank's woeful finances dominate the headlines, its poor IT history also continues to affect customers. Co-op Bank nearly collapsed in 2013 until a rescue …

  1. Anonymous Coward
    Anonymous Coward

    Co-Op customer here, and we were warned well in advance that the online services wouldn't be available over the weekend. The cards still worked when purchasing stuff, I could still take money out. What they didn't tell us was that you couldn't check your balance at the ATM, nor could people still transfer money to you.

    However, the biggest clusterfuck with the Co-Op since the yanks took charge is the online banking system. It's a complete pig. They require a self-made username and password to access it, another pin number, and that's it. Before you would need your sort code and account number, 2 digits from your old 4 digit PIN, and the answer to one of 4 questions.

    In my mind the old way was more secure, as any old idiot can reuse a username and password they have for another site. And if that got hacked? What then?

    To add more insult to this, with the old system you could go back over 12 months and view statements. It was enough to tell you who paid what to who and when and for how much. Now though, unless you're paperless, you can't access them.

    This whole thing annoyed me, especially as I stuck with them during their crisis, so I complained to the bank. I got a phone call the other day trying to explain it, but it was a proper patronising excuse as the changes were meant for "security reasons" etc etc. I told them to stop, I told them I have worked on systems that have to be accessed by thousands of people and the security risks involved. I have demanded that whatever bright spark thought this new system was a good idea to put in writing as to why they thought that.

    The letter is in the post apparently, but I've had enough of the crap. Off to TSB I go, if only for the 5% interest on balances they're offering.

    A/C because I don't want the Co-Op to shut my bank account down.

    1. Anonymous Coward
      Anonymous Coward

      Same with Smile.

      1. Anonymous Coward
        Anonymous Coward

        Yeah, I've been less than impressed with the new incarnation of online banking. I was willing to give the Co-op a few years to try to sort out the bank, too, but it looks irretrievable now. Time to go look around the building societies I don't already have an account with...

        (AC for paranoia's sake only.)

    2. Steve Davies 3 Silver badge

      Not available?

      That was the whole IT system being sent to India (or other low cost destination). Someone got on a plane with the backup tapes. (joke)

      The VC's will want to lower the cost base to make it more attractive for a sale.

      The needs of the customers is at the bottom of the list.

      Perhaps it is time to move your accounts to somewhere else but where?

      1. Anonymous Coward
        Anonymous Coward

        Re: Not available?

        Probably better to take the £125 switching cash from TSB now, given that's who they are likely to merge with. The problem is now, its easier to use the card reader and reset all security info, to log in (it's less steps) than go the conventional system of Sort Code, Account Number, PIN, Username, Memorable Password, School etc.etc.

        I've had more complaints against Smile in the last 3 months than in the last 17.5 years. Yep banked with them since day 1 in 1999. The old website (pretty advanced in 1999) used to 'just work', it was frugal in terms of data (you could send a bill payment from the back of beyond using 2G Mobile, if you really had to). The new interface is bloat, and slow tedium. I didn't realise it was Capita bloat, but that just makes perfect sense now.

        Shame, as the Telephone Customer Service is second to none, but as Smile customers we were being told we can no longer use Telephone CS from 26/02/2017. And Telephone CS is only good thing left about Cooperative Bank / Smile.

        Time to leave.

        1. Doctor Syntax Silver badge

          Re: Not available?

          "Probably better to take the £125 switching cash from TSB now, given that's who they are likely to merge with."

          No way! It was the attitude of a now TSB branch that made me quit Lloyds; I'm not going back to either of the current manifestations of that lot.

      2. Doctor Syntax Silver badge

        Re: Not available?

        "Perhaps it is time to move your accounts to somewhere else but where?"

        But where indeed.

        In my preferred location HSBC closed their branch. I moved (after 40 years or so with Midland, Northern, HSBC) to Lloyds. They closed their branch. I moved to the Co-op, not because they had a branch there but because they had a branch with more convenient opening hours inside a store. They closed that. YBS, who are the only financial business still open there, took over a building society that had a current account so I expected them to roll out that to the whole network; now they're closing the current accounts instead.

        We hear about the so-called challenger banks. If they want to do some serious challenging they really should look at where the existing banks are wide open to challenge: customer service in places where customers live.

        1. Anonymous Coward
          Anonymous Coward

          Re: Not available?

          "Perhaps it is time to move your accounts to somewhere else but where?"

          It depends what you value - for Customer Service First Direct is hard to beat.

          CoOp seems to have been prettying itself up for a new owner for some months. Lets just hope it isnt RBS - thats a whole other level of badness.

        2. Tom Paine

          Re: Not available?

          Alas, the economics of running branch networks are about the same for any banking organisation. If it's not viable for Bank A to keep open a branch where, presumably, it has quite a lot of customers in the local area, how could it be viable for Bank B who have few customers there?

    3. Stuart 22

      Yes, I've now been with them over 50 years (when Westminster Bank cleared their cheques). My company also banks with them (no surprise there).

      I've had accounts elsewhere but for nearly all that time the Co-op has consistently given me the best service. Even when it comes to speed trading I remember when I could buy shares with a simple phone call to the lovely lady in the socialist Birmingham back office while my work colleagues were trying to authenticate themselves through fax machines with the capatalistic big five.

      It all started to go pear shaped when Thatcher made Building Societies game for asset snatchers. Half disappeared, the other half tried to compete by becoming snatchers themselves. And so the Co-op foolishly swallowed Brittannia only to find it was a big blackhole that ultimately consumed them.

      Except that should have been apparent during 'Due Diligence'. Done by one of the big accountancy practices no doubt. So who conned who? And why as both a Co-op member and customer not been informed by them or, more importantly, the FSA or other quango supposed to be protecting us - what happened, who is responsible and why they shouldn't go to jail.

      I feel so let down. Not by the lady in the Birmingham back office. Not for the Co-op Bank I knew. But those who by ommission or commission have almost destroyed community based banking in this country. Worse that it should be swallowed up by bank CEOs who have done rather worse for this country and the world than having a sniff of a couple things they shouldn't.

      Yet that's the image the news media like to play this morning.

      1. paulf
        Alert

        @ Stuart 22 "It all started to go pear shaped when Thatcher made Building Societies game for asset snatchers."

        The implosion Thatcher caused culminated in the raft of demutualisations in the late 1990s (Halifax+Leeds Permanent, Woolwich, B+B, A+L et al). After Abbey National converted first in the late 1980s it all went relatively quiet until 1994-ish.

        My take on Britannia is a little different as this didn't happen until 2009-ish. They were fucked by bad lending and knew it. They realised they had to sell out to some sucker so they could scarper before the shit hit the fan. Step forward Co-Op bank which had the same empire building zest as their owners at Co-Op Group (the ones who paid £1.6bn for Somerfield and have spent the last few years reversing it!). Britannia were savvy though and even lobbied for a self serving change in the law so that a mutual Building Society could merge with a Provident Society like the Co-Op Bank.

        I was a Britannia member but don't flame as the black hole wasn't my fault - that was down to Platform their sub-prime mortgage specialist lending unit. The corpse was so rotten the members got ziltch from the shadow conversion of Britannia - all we got was a £1 membership of the Co-Op group, with the £1 paid out of Britannia reserves just before it all completed. That's how much the whole BBS business was worth - £1 per member. Co-Op members got shafted worst in the long run though. That shows they must have known there was something stinky about Britannia. I do wonder what would have happened to BBS had they not been acquired; probably some kind of bankruptcy and rescue as happened to Dunfermline with Nationwide.

        So I think the question is not whether Due Diligence was done or not, but whether the warnings were heeded. The answer to that is clearly, La la la we're not listening "No". I don't think the Co-Op were conned as such - they wanted BBS to increase the size of their empire regardless of the eventual cost. It was that same empire building that eventually caught them out - their attempt to acquire the branches that became TSB from LBG. The external regulator due diligence to make sure they were strong enough for the deal to go through is when the problems were spotted.

        As far as I'm aware the BBS team at the time have escaped any sanction for the part they played. I suspect the situation is the same on the Co-Op side of things apart from Flowers who went to jail for Meth and Crystal rent boys.

      2. Tom Paine

        Co-Op Bank customer, too, here.

        (1) Banks are regulated by the PRA ("Prudential Regulation Authority")

        (2) the bad due diligence on Britannia was entirely the fault of the incompetent Buggins' Turn amateurs on Board. Those responsible were fired and disbarred by the PRA (meaning: "you'll never work again".)

        See, eg., http://www.thisismoney.co.uk/money/markets/article-3401619/Two-former-bosses-operative-Bank-banned-life-City-posing-unacceptable-threat-future-troubled-bank.html

        https://www.theguardian.com/business/2013/jun/17/coop-bank-six-executives-responsible

        http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10469956/Co-op-crisis-a-shambles-waiting-to-happen.html

    4. MyffyW Silver badge

      New Online Co-Op

      Since the new logon my password seems to randomly change whenever I try to logon. Was blaming baby brain or my advancing years, but I have documentary evidence (well a scruffy bit of paper).

      1. hoola Silver badge

        Re: New Online Co-Op

        I have experienced exactly the same thing. You have 100% certainty on the credentials and it claims one part is incorrect. Then it locks you out so you have to fart phoning and using the card reader to reset it all. What is even more stupid is that the same said IGEL reader could have been used for Two-Factor authentication. But wait, that would have required intelligence on the part of the designers. The new website is clearly a piece of generic crap put together by someone who only uses a mobile phone.

        The writing has always been on the wall as soon as the Hedge fund parasites got their hooks in. As with all these types of outfit, they are always looking for a quick profit and a way out, often before they have even bought in. You can have total confidence that the fund managers involved have nice fat bonuses and have ensured large amounts of assets have been removed already.

    5. Hollerithevo

      It seems we Co-op account holders all agree

      We stuck by the Co-op, hoped their online banking would be improved and discovered quite the opposite, and now watch unhappily as we await the new owners. I am shopping around for a new bank, unwillingly, but it seems this is the time to jump.

      The telephone banking people have always been superb. I hope they are TUPEd over.

    6. rd232

      TSB interest

      TSB interest is no longer 5% unless you're a student - it's 3%, and only up to £1500.

      http://www.tsb.co.uk/current-accounts/classic-plus-account/

    7. Anonymous Coward
      Anonymous Coward

      the new logon is bad enought, the fact that they transfer you to an american server to enter the security details is something I've already complained about. I've pointed out that given the american attitude to privacy/security this is a really bad idea, almost as insecure as opening a Bank of America account.

      I've yet to see whether that has been rectified this weekend, but I'm not holding my breath. There may be a change in banks in my future.

    8. montyburns56

      Yeah, I'm also a customer and I also thought that the old password system was way more secure

      than the new one which relies on bog standard passwords and a six digit number, for which I'm betting a lot of customers have just used their date of birth.

      1. Anonymous Coward
        Anonymous Coward

        Original AC thread starter here.

        When I got home yesterday I received the letter from the Co-Op after my complaint about their online banking. I don't have it with me right now, but I'll write the full transcript later.

        But anyway, they address the point of the password system. They said that because people can now create their own usernames and passwords it increases the number of possibilities of what it could be. I understand, but they don't understand that most people use the same username and password across many different websites! They don't share their account or sort code etc.

        I'll transcribe the letter later, after I've drafted my response.

  2. Your alien overlord - fear me

    Prudential Regulation Authority - is that an authority sponsered by the Pru?

  3. Anonymous Coward
    Anonymous Coward

    I have a drug problem and know nothing about finance, can I have the job of running the Co-op bank ?

    1. Red Bren

      Only if you're a member of the clergy.

  4. Tezfair
    Unhappy

    Shame if they go

    I do business banking with them, and because i'm with the FSB, not only is the business banking free, the co-op gives me £25 per year.

    1. Anonymous Coward
      Anonymous Coward

      Re: Shame if they go

      "i'm with the FSB"

      Ah, Mr Trump Putin, welcome to El Reg.

      1. the spectacularly refined chap

        Re: Shame if they go

        In this context I would assume Federation of Small Businesses rather than the Russian secret police.

  5. Anonymous Coward
    Anonymous Coward

    "comprised of" ? tut tut.

  6. Anonymous South African Coward Bronze badge

    And we thought banking in South Africa is for the dogs.... Ever since Capitec entered the banking market, they have been making inroads, causing the other big banks to adapt or lose customers.

  7. Anonymous South African Coward Bronze badge

    Working in banking sector IT

    Not for me thanks. Must be a job with extreme pressure and high stress levels.

    1. Ogi

      Re: Working in banking sector IT

      > Not for me thanks. Must be a job with extreme pressure and high stress levels.

      It is, hence they the pay tends to be better than outside of the financial sector.

      Or at least, it used to be. Tech companies have upped their game, and offer similar pay and benefits, without the stress. One of the reasons I moved out of Finance for my latest job.

  8. PierreThePlum

    Jumped ship last November

    I admire those of you still loyal to Co-op Bank and only just considering moving. I lost patience the end of last year and left, reluctantly, for pastures new. Je ne regrette rein.

    1. Dabooka

      Re: Jumped ship last November

      Yeah, I've been putting off but I now they're throwing in the towel I'll follow suit.

      First Direct or Nationwide.....

      1. enormous c word

        Re: Jumped ship last November

        Interestingly I do my banking with First Direct and mortgage with Nationwide. No complaints with either. Telephone Banking with First Direct is second to none. Online banking isnt flashy but it does exactly what I need it to. Nationwide (was with Derbyshire) have no complaints with either.

    2. Doctor Syntax Silver badge

      Re: Jumped ship last November

      "I admire those of you still loyal to Co-op Bank"

      Loyalty has nothing to do with it. It's just the wasteland that the rest of the banking industry offers that makes the options look no better.

      1. PierreThePlum

        Re: Jumped ship last November

        Dabooka,above, may have a couple of suggestions for you?

    3. Anonymous Coward
      Anonymous Coward

      Re: Jumped ship last November

      Lazy rather than loyal, but it is clearly time to move on...

  9. Anonymous Coward
    Anonymous Coward

    The co-operative bank is not a co-operative. It is now 80% a privately owned company.

    It should change it's name.

    Co-operative used to MEAN something.

  10. James 47

    I've been with Smile for years, just transferred my S&S ISA allowance out upon hearing the news this morning. Also shopping around, the website is awful, but I've never had issues with the customer service. It did take over a week for a replacement debit card to arrive, but that's about it

  11. John Smith 19 Gold badge
    Unhappy

    Having Crapita running your mortage processing. Sounds like a recipe for trouble.

    Is a recipe for trouble.

    But you have to wonder.

    How many others do the same?

  12. Anonymous Coward
    Anonymous Coward

    "Co-operative used to MEAN something."

    Yes, other anonymous coward, "Co-operative used to MEAN something." To me it meant RIP OFF!

    Many years ago, back when I was a child (and dinosaurs walked the earth), my parents were very enamoured of the Co-op (this was before it diversified into such things food stores). My parents enthused greatly about the "divvy." For every pound you spent, if you could be bothered to also spend five minutes, an assistant would dutifully enter the details of your transaction into your divvy book, entitling you to one shilling (5p) for every pound you spent.

    I compared Co-op prices with those of their competitors. I found that even after taking the divvy into account, the Co-op was a good deal more expensive than their competitors. And if you didn't have the time or inclination to get the transaction entered into your divvy book, more expensive still. They were a freakin' rip off.

    But then the Co-op replaced the divvy with Green Shield stamps. Each till had an attached stamp dispenser. The assistant rang up your transaction on the cash register, then rang it up again on the stamp dispenser. Much faster for all concerned. A saving in staff time, so you might even expect lower prices or stamps to exceed the value of 5p. Not with the Co-op. The prices were just as high. You got many stamps, but their redemption value equated to a small fraction of an old penny (an even smaller fraction of a new penny) for every pound you spent and therefore a MASSIVE reduction over the 5p in the pound divvy.

    It was at that point that I vowed never to use the Co-op again. Ethical, my arse. For the last 40 years I have refused to deal with any organization bearing the Co-op imprimatur. Not the Co-op. Not the Co-op pharmacy (now sold off). Not the Co-op bank. When they took over my local Somerfield, I shopped elsewhere.

    Co-operative still does mean something. The same thing it always meant. RIP OFF.

    1. Anonymous Coward
      Anonymous Coward

      Re: "Co-operative used to MEAN something."

      Just because one shop is more expensive than another doesn't mean it's a RIP OFF.

      I agree that co-op is almost always more expensive than Tesco, despite the fact that Tesco pay profits to shareholders.

      But most smaller, local shops are more expensive than Tesco and it doesn't mean they are a RIP OFF.

      RIP OFF I would reserve for shops that sell things at a massive mark up, making lots of profits for the seller. With the co-op all profits are shared with the shopper, so there can't really be a rip-off at all.

      1. Tom Paine

        Re: "Co-operative used to MEAN something."

        "rip off" is meaningless. Without wanting to get all Adam Smith about it, prices are determined by the equilibrium between supply and demand. Suppliers always try to maximise the price, of course they do, it's in their interest. If you want prices to fall you can increase competition (if that's the reason they're high) or reduce demand (ditto) but if there's reasonable competition and demand is fairly static, as with personal finance products, the price is what it is and moaning about it being a "rip-off" is just that... moaning.

    2. Anonymous Coward
      Anonymous Coward

      Re: "Co-operative used to MEAN something."

      I must admit I had a bad experience with CoOp Financial Services, I went to them for a Unit Trust scheme through the son of a family friend who had just started there as a financial adviser. He was shadowing his boss who offered me their top 3 performers, I took the best of the top 3, only to find a few months later that all had been losing money and I had chosen the least bad of the 3. Soon after the trainee had run out of friends and family to sell to and was sacked - leaving his mgr with a bunch of new customers. After that I learned not to trust Financial Advisers, or the CFS.

  13. Anonymous Coward
    Anonymous Coward

    Used to like the Co-Op bank.

    I was with them around 25 years ago. They had a little office/counter in my local Co-Op supermarket which was very handy. First they closed that counter, then a few years later closed the store too. Sounds like they've been going steadily downhill all this time.

    1. Anonymous Coward
      Anonymous Coward

      Re: Used to like the Co-Op bank.

      The COOP has been going downhill for decades. Believe it or not, there was a time in the 1960's when the accumulated COOPs had a greater share of the UK grocery market than Tesco has ever achieved. The problem was each COOP was run as a little fiefdom by generally small minded incompetents (so much for brotherly cooperation). To be fair, there were those running the Cooperative Wholesale society who knew this and tried to bring about the consolidation of their Cooperative retail society brethren.

  14. Anonymous Coward
    Anonymous Coward

    Going downhill fast

    The new version of online banking is awful. Recently I found that I needed some duplicate statements. A lass on the customer services phone line (hours now reduced) was able to get the duplicates sent out, first checking to see that I wasn't paperless. The implication being that had I been paperless the request would have been a no-no.

    I've had a couple of issues with the Co-op bank in the past. A couple of outages when I needed to get some money did not enamour them to me. Then when they refused to add my fiancée to my account I kicked up a fuss.

    Seeing that Crapita are now involved here is the icing on the cake. As one shepherd said to the other, time to get the flock out of here. Trouble is, where?

    1. John Brown (no body) Silver badge

      Re: Going downhill fast

      "A lass on the customer services phone line (hours now reduced)"

      From what? Phone banking is open 24/7. Did a funds transfer at 11pm last night, a half hour before the supposed re-opening time after the maintenance. Lassie on the phone told me she was on shift till 2am.

      1. Mark Exclamation
        Joke

        Re: Going downhill fast

        So, it's gone to the dogs, then?

      2. wolfetone Silver badge

        Re: Going downhill fast

        "From what? Phone banking is open 24/7. Did a funds transfer at 11pm last night, a half hour before the supposed re-opening time after the maintenance. Lassie on the phone told me she was on shift till 2am."

        I received a letter telling me the telephone banking hours were being reduced as well.

  15. rd232

    Oh dear

    I've been with Smile for 15 years. I've used nearly every online banking interface going, and most were (as of last year) better than Smile. Then they changed the systems, to something that looks like a student project for a mobile app; it's just appalling on desktop.

    I'm loathe to give up on it, and I have so many current accounts I have to pause to count them... but I increasingly sigh when I have to log on to that account.

  16. Anonymous Coward
    Anonymous Coward

    Like many others, I've stuck with them - been there more than thirty years, purely by dint of my youthful self moving to them from Midland (remember them?) because I worked for a solid socilaist local authority, and your wages went in one day earlier if you were with the Co-Op!

    Their customer service has always been great, including the telebanking team, they've always been there and helpful when it was needed, and never tried to sell me some ridiculous shite when it wasn't.

    I also admire their ethical stance, if only more FS companies had similar morals.

    I will stick it for a while; yes the new online site isn't great, but then again it's not radically worse than HSBC, RBS or any of the others. Let's see who picks them up - TSB has been mooted.

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