All entries for Friday 12 October 2007
October 12, 2007
Over the summer, an online campaign led by the National Union of Students led to a fairly embarrassing u-turn by the UK’s largest bank. The row started when HSBC decided to withdraw its offer of an interest-free overdraft for graduates. Suddenly, account holders leaving university in 2007 were facing charges of up to £140, with barely a month’s notice. The bank was hardly reassuring, claiming that the move would help students make the transition to working life. Graduates were also reminded that they could take advantage of the ‘Graduate Plus’ account, offering preferential treatment at a cost of £9.95 a month.
The response came in the form of the Facebook group, ‘Stop the Great HSBC Graduate Rip-off,’ formed by NUS vice-president Wes Streeting. The campaign attracted a good amount of press coverage, allowing student representatives to highlight the financial difficulties faced by graduates, particularly those who go on to further study or into low paid jobs and internships. By August, over 5000 angry students had joined the group, and a protest outside the bank’s headquarters in London was planned for early September. HSBC finally bowed to the pressure, announcing at the end of August that they would reverse their decision and work with the NUS to deliver a service that “fully reflects the needs of recent graduates.”
That an online campaign forced a financial giant like HSBC to u-turn in this way might surprise some. It wasn’t quite David versus Goliath, but it was hardly an even fight. The bank made £11 billion in profit last year, and has a strong enough presence on the high street to ensure that its student account remains popular. In addition, a strong selling point for HSBC is its status as the “world’s local bank,” which gives it a distinct edge over its smaller competitors.
Despite this, the bank claims that it is not too big to listen to the needs of its customers, and has now agreed that graduates are entitled to a bit of breathing space during the gap between study and employment. This is of course a great result. But those who want to forgive and forget should pause to reconsider.
The decision to charge graduates was a shabby attempt to take advantage of those who have no choice but to get into debt. The attempt by HSBC to disguise this as a helping hand was as patronising as it was transparent, and it is hard to believe that it would have listened to students had there been no coverage of the campaign in the national media.
It should be also be remembered that this is not the first time that the bank has been accused of taking advantage of those with financial difficulties. In July, the Office of Fair Trading accused HSBC (along with eight other leading high street banks) of charging excessive fees to those who exceed their overdraft limit. Nor has “the world’s local bank” always been honest about its fees; in August this year, the Advertising Standards Authority decided that the bank had falsely claimed customers could withdraw cash free of charge.
It’s true that all banks have to make a profit. HSBC have shown that they are particularly good at finding new opportunities to do so. And whilst that’s great news for shareholders, it’s not so encouraging for those of us who, for one reason or another, have to live with debt for a few years. There are plenty of banks out there, some of which have put a lot more thought into how they treat students and those on lower incomes. Any of these would be more trustworthy than the bank that initiated the ‘great graduate rip-off’.
Written for the Warwick Boar, 11th October 2007