Graduates furious with HSBC

| August 29, 2007 | 0 Comments

In the past, the majority of High Street banks (including HSBC), have allowed students an interest-free overdraft of around £1,500 to £2,000 for the first 2 years after they graduate. However, last month, HSBC became the first High Street bank to commence charging interest on such an account, at 9.9%.

This has prompted a strong reaction from University graduates by its decision to charge interest on overdrafts that were, in the past, interest free. Some students who are graduating this summer are now faced with bills of up to £140 a year, because they continued to run an overdraft after the bank withdrew its interest-free offer last month.

Students have reacted with a campaign called “Stop the Great HSBC Graduate Rip-Off!” through Facebook, the online social networking site. The campaign is growing fast and has 2,500 graduate members.

Some students are also blaming the bank for failing to give the 30 days’ notice of a major change in conditions that is necessary under the banking code. Student account holders did receive a July mail shot on the subject, but for many this only arrived at the end of the month with the new charges starting on August 8th.

In response to the above, HSBC has declared 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.

Finally, on September 4th, the National Union of Students are planning a protest outside HSBC’s head office in Canary Wharf, London.

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