Co-operative Bank to end £15 customer service guarantees

Co-operative Bank’s long-standing “money where our mouth is” policy is being given an overhaul.

The Co-operative Bank’s £15 Service Level Guarantees (SLGs) – which have distinguished the mutual from other high street banks for years – are to be scrapped.

The mutual has written to customers to inform them that it will be removing its SLGs later this year, effective from the 16th of September.

SLGs

For 20 years, the Co-operative Bank has paid customers £15 whenever it fails to meet one of its own self-imposed standards called Service Level Guarantees.

These guarantees make the Co-operative Bank accountable for efficiency and accuracy in most cases to new and existing current account holders.

The SLGs make four promises:

• To open an account within 48 hours.
• Not to make any financial errors on statements.
• To automatically issue a cheque book or new card as appropriate.
• To set up standing orders and direct debits without any mistakes.

Despite the overhaul, customers have been told they won’t see these core service values disappear.

The Co-op said everything that was covered under the SLGs will still be covered as part of the Co-op’s standard complaints process, so customers wouldn’t lose out as a result of the change.

In fact the bank said some customers would still be compensated in-line with the nature of their complaint.

Why the change?

The Co-op said it was withdrawing the guarantees because the number of customers using them had dropped by a third over 2012 and were still falling this year.

But with a £1.5 billion black hole to fill in its banking arm at the moment, you would be forgiven for thinking this was a cost cutting exercise from the troubled mutual. Read more about the Co-op’s financial struggles in The Co-op pulls out of Lloyds' branch sale and what the Co-op Bank downgrade means to you.

Co-op denied this and said the move was not linked to its difficulties, although it did not comment on how much cutting the £15 guarantees would potentially save.

Improving customer service

The bank claimed the overhaul of the guarantees is intended to help speed up the resolution of complaints.

Co-op said the guarantees have become out-of-date with a focus on things like cheque books, and it wanted to bring the service in-line with customers’ needs today.

Has Co-op lost its edge?

This move isn’t the end of the world, but it does take the mutual down a peg or two.

It will no longer be able to laud its “money where our mouth is” policy, which for so long has differentiated it from most other high street banks.

But the mutual still thinks it stands out from the rest. It said its service is consistently recognised, most recently when it was named top high street bank for customer service by Which?

It also pointed out that it was the first high street bank to remove sales targets for staff replacing these with targets on good customer service.

Other cash guarantees

It’s usually a good sign when a business is willing to back up the quality of its service or product with a cash guarantee. But it can be difficult to find one that does. Here are a few that spring to mind.

First Direct has been offering a £100 cash incentive to switch to its 1st Account for a while now, but switching to the bank also gets you a 12-month £100 satisfaction guarantee that you can claim if you’re not happy with the service and want to leave. That’s some show of confidence in what it does, but then First Direct does have a pretty robust reputation for excellent customer service (it has a 24-hour UK helpline) and for only offering deals to existing customers.

Read more in: Exclusive deals banks and building societies offer existing customers.  I signed up in April and haven’t been able to think of an excuse to leave yet!

Elsewhere SSE threw down the gauntlet earlier this year, amidst growing dissatisfaction with energy companies, and pledged a £20 guarantee to any customer unhappy with its service. It has come up with ‘five promises’ that if broken mean you get a pay-out. Read more about it in: SSE to pay £20 to customers unhappy with customer service.

Finally, Thames Water also has a Customer Guarantee Scheme which pays from £30 up to £1,000 when its service isn’t quite up to scratch. On the lower end of the scale you can get £30 instantly credited to you if Thames Water take longer than ten days to respond to a written complaint about its water or wastewater services. And at the top end a maximum of £1,000 will be compensated each time flooding from sewers overflows into your building or suspended floor.

Other areas the company takes seriously are appointments, billing queries, interruptions to your water supply and low pressure. You can see if you are eligible for any credits on the website.

If you know of any other companies willing to put their money where their mouth is please share in the Comment box below.

More on banking:

The best bank accounts for cashback

Who owns your bank or building society?

UK banking costs to soar under new EU rules

Handelsbanken: the great bank you've never heard of

Is your money safe with a bank you've never heard of?

Nationwide current account pays market-leading 5% interest

Online and mobile banking: your rights when something goes wrong