HSBC angers graduates

by Gill Montia

Story link: HSBC angers graduates

HSBC has evoked a strong reaction from University graduates by its decision to charge interest on overdrafts that were previously interest free.

Some students who are graduating this summer are facing unexpected bills of up to £140 a year, because they continued to run an overdraft after the bank withdrew its interest-free offer, in July.

Previously, most High Street banks (including HSBC), have allowed students an interest-free overdraft of around £1,500 to £2,000 for the first two years after graduation.

However, in July, HSBC broke with tradition and became the first High Street bank to begin charging interest on such an account, at 9.9%.

Students have responded with a so called “viral” campaign which is directed through Facebook, the online social networking site.

The campaign, which is called “Stop the Great HSBC Graduate Rip-Off!” has 2,500 graduate members to date, and is fast growing.

In addition, on September 4th, the National Union of Students plans to carry out a protest outside HSBC’s head office in London’s Canary Wharf.

Some students are also accusing the bank of failing to give the 30 days’ notice of a major change in conditions that is required under the banking code.

Student account holders did receive a July mail shot on the matter but for some this only arrived at the end of the month, while the new charges started on August 8.

In response to the protests HSBC has stated that they have complied with the 30 day requirement and that those finishing their first degree should move to their new graduate account.

This provides an interest free overdraft facility for a monthly charge of £9.95.