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Last Updated: Tuesday, 28 August 2007, 12:39 GMT 13:39 UK
Students putting pressure on bank
Students
Students are using Facebook to put pressure on overdraft charges
A student protest against higher bank charges, organised on the Facebook website, is threatening to embarrass the HSBC bank into reversing its plans.

The online protest, with threats to boycott the bank, has gained a thousand more members since the weekend.

The dispute is over HSBC's plan to scrap a three-year interest-free overdraft deal for graduate accounts.

The bank says this is a "commercial decision", made in response to bad debt and the misuse of such accounts.

But students say that they joined the bank in the belief that they could take advantage of such a free overdraft to tide them over between leaving university and starting work.

Pressure

The timing of the dispute is particularly embarrassing for HSBC - as banks are seeking to recruit new student customers at the beginning of the academic year.

One of the students attacking the decision on the Facebook website says: "They've shot themselves in the foot to be quite honest. Why would they want to alienate themselves from graduates who'll be earning high salaries in years to come?"

In recent days, the protest has gathered support from thousands of students at a range of universities - with hundreds expressing their anger in website comments - putting pressure on HSBC to re-think its proposals.

Instead of using leaflets and loud-hailers, this student protest is gathering support through Facebook, with the Stop The Great HSBC Graduate Rip-Off group so far acquiring almost 3,500 members - an increase of about 1,000 since the weekend.

Students and recent graduates writing on the Facebook website are threatening to switch to other banks and are calling for boycotts at freshers' fairs.

"I've switched already. If everyone followed suit then HSBC would realise we're not all lazy/ignorant/stupid idiots," writes one group member.

"I am so disgusted with HSBC right now - it actually makes my blood boil... Never before have I lost so much faith in an organisation. As soon as I can I am closing my account, moving my ISA and finding a new decent bank," writes another recent graduate.

Another protestor says that students will "paralyse their banks across the country" in a day of action planned for next week.

The protest is being organised by the National Union of Students - which is attacking the bank's plan to scrap interest-free overdrafts for university leavers.

Bad debts

HSBC had previously offered students interest-free overdraft facilities for up to three years after graduating - as a stepping stone between university and work.

This facility is now being removed, which will mean that account holders who have graduated this summer will face charges on outstanding overdrafts.

A spokesman for HSBC says that the planned changes will still mean that graduates are getting a discounted overdraft rate - charged 9.9%APR rather than the standard 18.9%APR.

The removal of the interest-free graduate service is a commercial decision, says the bank spokesman - reflecting the cost of providing such facilities for customers who did not stay with the bank.

There were a number of former students running multiple graduate accounts - taking advantage of interest-free overdrafts from a range of different providers, says the HSBC spokesman.

These graduates were benefiting from the interest-free arrangement, but had no intention of having a "long-term relationship" with the bank, says the spokesman.

There has also been a problem with bad debt associated with these accounts, says the spokesman, with graduates "walking away" from overdrafts and proving difficult to track down to recover the debt.




SEE ALSO
Fees 'pushing up student debts'
14 Aug 07 |  Education
If your face fits
27 Jun 06 |  Magazine
Unruly students' Facebook search
17 Jul 07 |  Education

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