Banking giant HSBC has been forced into an embarrassing u-turn over interest charges on graduate overdafts following a successful protest campaign on the Facebook social network organised by the National Union of Students.
The rapidly proliferating campaign, called 'Stop the Great HSBC Graduate Rip-Off!', (see
Finblog earlier this week), attracted 4000 members and generated reams of bad publicity for the bank. Students were angered by HSBC's decision to scrap interest-free overdrafts for university leavers and to charge interest at 9.9%.
HSBC initially sought to tough it out but had to rethink its position as the Facebok protest gathered momentum, resulting in today's decision to freeze overdraft charges and repay fees deducted from account holders in August.
The bank acknowledged the power of the online community in forcing the reversal.
"We are a service-oriented organisation and we have to listen to our customers - that is a priority for us,” said a spokesman. "It's a good example of where a medium like Facebook has enabled customers to tell us something they feel strongly about.”
Despite the climb-down, HSBC will feel the sting from the protest for some time to come. Johnny Chatterton, a graduate of Leeds University and a customer for ten years, told the FT: "I don't trust them at all anymore, and won't bank with them in the future.
But the success of our campaign shows how powerful Facebook can be."