THE CO-OPERATIVE BANK P.L.C · DRN-6237386

The complaint Mr H complains about the interest rate and the service he received on his Smart Saver account with THE CO-OPERATIVE BANK P.L.C (“Co-op”). What happened Mr H held a savings account for a number of years with a building society which was transferred to a new Smart Saver account with Co-op in June 2023. In October 2024, Mr H received a statement for this account confirming that the interest rate was 1.81% - which surprised him. In Mr H’s view, the rate was significantly lower than other savings providers were offering in the market at the time. He was also unhappy with a lack of clarity around how this rate was presented in the information he received. In light of this, Mr H tried to call Co-op to open a new account that earned a better rate of interest, but and encountered significant waiting times. So he went to a branch only to be told that he didn’t have the correct forms of identity to open a new account and that he would have to return a week later with his identification. Mr H was unhappy with this and closed his account and made a complaint. In addition to the above, he added that he was unhappy with the generic nature of the letters he received from Co-op in relation to his account and that Co-op didn’t contact him about other accounts with better interest rates. Co-op responded to the complaint to say that the rate on Mr H’s account was a reflection of the current products it offers and so didn’t uphold that element of his complaint. It did agree to pass on feedback in terms of making the interest rate clearer on the statement. Co-op the explained that it doesn’t offer an advised service to customers with savings accounts about higher interest rates as it is their responsibility to research and find accounts that suit their needs. Co-op provides information online and by phone and in branch to help customers make informed decisions. Co-op did accept that its call waiting times had been unacceptable and upheld this element of Mr H’s complaint – offering him £25 for this. But in terms of the service he received in branch, Co-op was satisfied that it had followed its policies and procedures in asking for identification documents and in what it told him about closing the account. Mr H referred his complaint to this service, where some of our investigators looked into it. They didn’t feel that Co-op needed to do any more to resolve the complaint and felt the £25 was fair. Mr H disagreed and so the case was passed to an ombudsman to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. In terms of the interest rate Co-op has paid on the Smart Saver account, I’ve considered all that Mr H has said about why he feels this rate is too low. But Co-op is entitled to decide on the interest rates that it’s willing to pay on products and it’s not for this service to say that these rates are ‘fair’ or otherwise. There was no requirement on a business to set its rates at

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any particular level or to justify its rates until 31 July 2023, when the FCA’s Consumer Duty – a higher set of standards of consumer protection – were introduced and which require a business to assess whether its products provide fair value. However the FCA is clear that it isn’t the intention of the Consumer Duty to set prices and it clarified that its rules do not have this effect. For clarity, nor is it this service’s role to do this either. Nor do these rules have the effect that Co-op should pay Mr H the best rate for the product, or the same rate as other firms. Co-op has supplied this service with an extract of the assessment it did in this respect for the Smart Saver account. It has provided this to us in confidence and given the content, I don’t think it would be appropriate to disclose this to Mr H or to go into any details of this in this published decision. Having considered it I’m satisfied that it demonstrates that Co-op has considered its obligations to provide price and value under the Consumer Duty. The FCA’s Cash Market Review from July 2023 stated that it expected to see a reduction in the proportion of easy access accounts paying the lowest rates of interest, in particular accounts paying 1% or less. The rate on this account from July 2023 onwards has been above the 1% identified and mentioned by the FCA. So while the rate may not be as high as Mr H expected – this account wasn’t one of those paying the lowest rate of interest for this type of product as identified by the FCA. So even if the rate isn’t what Mr H thinks it should have been, I’m not persuaded that it was an outlier in the market either. While I don’t think Co-op has acted unfairly in respect of the interest rate its applied to Mr H’s account, I have gone on to consider whether it has treated him fairly in respect of making him aware that he was receiving this rate. I’m satisfied it has. I say this because the terms of the Smart Saver account clearly explain how the account will operate and the nature of the interest rate: “Yes. the interest rate is variable. which means it can go up or down. We may change your interest rate for various reasons, please see the ‘Changing these terms and ending this agreement’ section of our General Terms and Conditions for more details. When we increase our interest rates — we’ll tell you about the change within 30 days after it’s happened. When we decrease our interest rates — we’ll inform you by personal notice at least two months before we make the change.” Co-op will also have sent statements confirming what the rate is, along with a letter I’ve seen from June 2023 that confirms that the account would be transferring to a Smart Saver account with a rate of 1.68%. So I’m satisfied that Co-op has communicated with Mr H in a reasonable way to make him aware of the interest rate on this account. I know that Mr H thinks Co-op should have directly contacted him about other accounts it offered, but it was under no obligation to do so. In any event, I’m satisfied it gave him clear information to understand whether the account was meeting his needs. Mr H says that the interest rate isn’t clear on a statement he provided. It is in small print at the bottom of a page, but equally the information is present and on the first page, so while I accept it could be clearer – I’m satisfied the statement does ultimately show the rate in a reasonable way.

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I’ll turn now to Mr H’s concerns around the service he received when trying to open a new account with Co-op. Co-op accepts that its call waiting times were unacceptable and has offered £25 for this. It seems like Mr H called three times and was on hold for a considerable length of time during each call. For that level of inconvenience, I think £25 is fair. Mr H also says that the service he received when attending the branch was also unacceptable. I can see why he was frustrated, as I imagine he thought that by attending a branch and discussing things face-to-face, it would be easier to open a new account. So he was frustrated when Co-op asked him to provide identification documents. In asking for identification in this way though, I’m satisfied that Co-op was following the procedures it has for identifying customers for security reasons. It may seem unnecessary and disproportionate to Mr H, but Co-op has a number of legal and regulatory requirements in order to keep customers’ accounts and money safe. It looks to have been following them here in asking for the identification documents. In such circumstances, I can’t say that Co-op has acted unfairly. Mr H is also unhappy with the process Co-op followed when closing his account – including that it sent him a cheque for the balance. But Co-op wasn’t able to close Mr H’s account when he attended the branch as he didn’t confirm his identity. Then after this it looks to have followed its procedures for closing the account, which includes sending him the balance as a cheque. I realise it will be inconvenient for Mr H to need to pay this in at another bank or building society and that it’s not as quick as a bank transfer or electronic payment. Sending a cheque is a valid way of making a payment though and while not as quick as an electronic method of payment, I don’t think Co-op acted unreasonably in sending the payment like this. My final decision THE CO-OPERATIVE BANK P.L.C. should pay Mr H £25 for the impact of its service on him, as it has already offered to. I make no further award. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr H to accept or reject my decision before 24 April 2026. James Staples Ombudsman

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