HSBC Cave In To Facebook Power
More than 5,000 people have joined a Facebook group opposed to HSBC’s scrapping on it’s free overdraft on graduate accounts, and have caused the bank to retreat:
More than 5,000 students got the bank to reverse its decision to stop free overdrafts for graduates after joining Facebook’s Stop the Great HSBC Rip-Off!!! group…
The bank said yesterday that it was not “too big” to listen to its customers.
It said it had frozen plans to charge 9.9 per cent interest on overdrafts of up to £1,500 for people who graduated this year.
It added that it would refund overdraft interest charged this month. (The Telegraph)
That a bank the size of HSBC has been forced to retreat on this policy shows the power that the internet and social networking sites such as Facebook can wield. It wasn’t long ago that Cadbury brought back the Wispa chocolate bar after on-line campaigns.
What their action of ending the free overdraft facility has done is dealt them a huge blow. The purpose of student accounts is to encourage a graduate to continue to bank with them after they have closed that account. What HSBC have done will cause big problems for them, especially with students, both now and in the future. If they are willing to change the conditions on an account in such a way and at such short notice, what will they do in the future? If I was a fresher going to University this September, I know that I certainly wouldn’t get a HSBC student account, and I have every intention of avoiding using HSBC myself.
Whoever at HSBC thought up this idea is an idiot. It has caused a PR disaster for them. I would be surprised if many freshers signed up with them, and if many of their existing student customers did not go elsewhere. the other banks must be laughing, with the problems HSBC have caused for itself.
Sources: The Telegraph, BBC
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I know nothing of business so forgive me, but why is this a bad move? Is it not indeed good PR?
On the other side of the coin I think it a very good thing the Internet has given such a loud voice to people who normally have none.
Interesting post.
The whole saga was a bad move - cancelling the free overdrafts in the first place. All that caving in has done is slightly lessened the pain. Even though they have moved back, many students will just avoid using them anyway, just in case.
I agree that the whole thing was a PR disaster, I think it is quite slimy that they have only agreed to freeze the overdraft charges for 2007 graduates, you get the feeling that there waiting for the press interest to blow over and then next year it will quietly go.
Not that I think they are doing anything wrong. Students just need to go elsewhere.
Yup, and I think they will. HSBC are going to lose out big time on students over the next couple of years.
BTW, I like your blog, James! Consider it added to the sidebar!