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The Co-operative Bank halts bankruptcy accounts

The Co-operative Bank halts bankruptcy accounts

Category: Banking

Updated: 18/09/2012
First Published: 17/09/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Co-operative Bank has confirmed that it will no longer offer basic bank accounts to new customers recovering from bankruptcy.

The bank blamed its decision on an 'unlevel playing field' and confirmed existing customers would not be affected.

As a result, Barclays is now the only provider in the sector to offer accounts to undischarged bankrupts.

Sylvia Waycot, finance expert at Moneyfacts, said: "It is worrying that this under-served section of the market is losing access to even basic bank accounts.

"Originally basic bank accounts were set up so that anyone who did not completely fit a bank's vision of their ideal customer could still access basic banking needs such as the ability to have direct debits".

"Over time, this has become lost in translation, and resulted in only the Co-op and Barclays keeping to the original ideal.

"Unless the entire banking industry is made to share these vulnerable customers then they will be forced into running their finances via the expensive guaranteed banking system which is not run by the traditional banks and will only further exasperate anyone trying to get back on their 'financial feet', concluded Ms Waycot.

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