The Co-Op Bank has hiked the monthly fees for its paid-for Privilege and Privilege Premier accounts by an astonishing 20%. From July, Privilege customers will see their monthly payments increase from £9.50 to £11, while Privilege Premier customers will see their monthly fee rise from £13 to £15.50 a month. Some customers with Smile will also see monthly fees rise from £13 a month to £15.50.
It's yet another bit of bad news for Co-Op customers, who are likely to be wondering whether they would be better off elsewhere.
Is it worth it?The company stopped offering these paid-for accounts to new customers at the end of 2013, but existing customers were allowed to keep existing accounts. They charge a fee, and in return they offer a number of benefits. The Privilege account offers free family worldwide travel insurance, mobile phone insurance, a £200 overdraft, a legal services hotline - and either credit report modelling, access to airport lounges or gadget insurance. Privilege Premier accounts also offer RAC cover.
Whether the services are worth paying for depends largely on whether customers take advantage of them. The Privilege Account, for example, will now cost £132 a year and if you were to use everything that was available to you, you have a family that travels regularly and an expensive phone, the equivalent could cost you £200 elsewhere. However, if you only tend to go away once a year with the family to Europe, you have a cheap phone, and don't plan to use any airport lounges, you'll be spending £132 for £50 of benefits.
Time to move?However, it raises the question of whether the Co-op bank is the right place for your money at all. It is currently battling a £1.5 billion black hole of debt. The company told The Guardian that this wasn't a case of customers paying for the bank's mistakes, but was a reflection of the increased cost of providing the account's benefits. It is just a co-incidence that a group massively in debt has started charging more for a product.
In another unfortunate co-incidence, the group raised the price of its energy tariffs just a few days ago.
Earlier this month in its Annual Report, the bank said: "We appreciate that customers and other stakeholders continue to feel angry about how past failings placed the future of the business so seriously at risk. I would like to apologise to them, to thank them for their continued loyalty." Surely by now that loyalty must be feeling tested.
A few days ago the BBC revealed that the Labour Party was seeking to cut its ties with the organisation. It cannot be the only one.