Facebookers bring HSBC to its knees

just an idea

don't overdraft your account?

novel concept really

Free overdraft? WHAT?

Back here in the US, if I SAY the word overdraft to my bank it is a $45 fee plus what the store charges (usually ~$35) to try to collect again. And it isn't that I go to a particularly crappy bank, most are like that. (they vary from $25 to $45)

Ooh I wonder......

I wonder if enough people protest, the bank will scrap my loan?

Nah......it still wouldn't make me go within ten hops of any facebook server.

RE: just an idea

That's a nice theory, but with the average student debt being around £14K* it may be hard for some to put into practice. Education is an expensive business in the UK nowadays.

*http://news.bbc.co.uk/1/hi/business/3683421.stm

@Jason Harvey

You've obviousely not been to uni for a good while. The whole thing is set up for you to rely on am pverdraft (hopefully the summer job pays it off).

Changing times

When I graduated in 2003, my HSBC account had a sliding scale free overdraft, starting at £1500 and decreasing by £500 a year. I was lucky/financially astute enough not to need it, but it seems their policy has changed a bit in the last few years.

What about a loan?

Overdraft?

If you know you need extra money why not get a loan?

Banks are crazy to let the students overdraft at all.

Really?

So, let me get this straight: students think that they're entitled to have their overdraft interest stopped while they swan off around the world after graduation? Sorry, layabouts, but that's when it's time to get a fucking job and stop leeching off the rest of the world. You've had your fun and you've had your education, graduation marks the point at which you've to start taking responsibility for yourself and to actually start contributing to society.

A rather important element is missing from this story

HSBC had sold these customers their accounts on the basis that they would get free overdrafts for a period after graduation. They then reneged on this promise by announcing that they would be charging for the overdraft facilities instead. So this isn't just a bunch of students expecting something for nothing - it's a bunch of consumers exerting their rights. Good on 'em.

@Jason Harvey

Hi,

I'm a Computer Science student, I could not go to university without an interest free overdraft. Its part of the uni process to get you by. Before you ask yes - I do have a part time job.

Unfortunately if your parents earn too much to qualify for a larger loan/government help with fees, but not enough that they can actually help you out, you need your overdraft to live. My student loan barely covers my rent let alone any fees. Just glad I got in before they introduced top-up fees. When I graduate I'll owe £14,000 in Student Loans and around £1500 from my overdraft.

I think Facebook is a good way to organise lots of people quickly as you can reach them on mass.

Jonathan

@Muneer Afifi

That's because in the US you've let the banks be in charge. In the UK we seem to have had more success so far in keeping the worst excesses in check - ATM fees a while back, free banking (albeit with pitiful interest rates on credit balances) and the current one about penalty charges. Another one of note was the campaign twenty years ago to get Barclays to withdraw from South Africa. The student campaign on overdrafts is just the latest reminder to banks that we do still have a choice.

Debt

If you this £14k is a lot, then think again. IIIRC, The average Stanford graduate debt was around $90k - and that was 20 years ago when the USD was worth something.

People power

Nice to see a protest from the UK population (or at least part of it), and one that worked too!

Yes, I know students would protest if they increased the price of beans by 1p, or made lectures compulsory, or [insert student-based cliché], but at least they didn't just sit back and take it like most of the people of the UK.

A financial agreement is a financial agreement...

This is about students holding onto what they were promised by a bank when they opened an account. A rough equivalent is:

If you bought a car with "interest free" for 5 years and at the 3rd year you are told that the bank has changed their mind and your finance wil nowl be charged at 9% APR you'd be pretty annoyed too!

By the time you have taken a £4000 student loan out to pay your fees, a "fees" loan to pay for your £3000 + in fees both of which need paying back when you start to work its not practical to graduate and imediately repay all your overdraft at once.

Overdraft vs Overdrawn

I think in the US overdraft is more equivalent to the situation in the UK we would call overdrawn. Which is when you have spent more money than you are authorised to do so. An Overdraft in the UK is the (pre-agreed limit, authorised) facility to withdraw more money in your account than you have (ie negative balance). They have been giving students large interest free overdrafts for a many years now.

Assumptions

"In joining HSBC, many students assumed they could make free overdrafts after graduation"

And the first lesson the students need to learn is... Never make assumtions about what the small print contains!

@Jason Harvey

Not always an option I am afraid. I would have not been able to complete my degree with out my significant student overdraft. (FYI I owe approximately £16,000 at the end of my degree and know people who owe considerably more)

While I have already cleared my OD (2 months of work is all it took) this was mearly the straw that broke the back and I have since left HSBC for the abby where I can actually use my bank on a weekend amongst other novel ideas...

A solution to all problems

Why not go to college in the US and get a UK bank account? That way you can get a cheap education AND piss it all up the wall, like we did here in the 90s.

There's just as much chance of getting shot in the UK now anyway, so there's hardly any downside in moving to America. Apart from the obvious...

Oh for F*** sake

When are students actually planning on growing up?

"wah wah wah £14K debt"

In my day, I couldnt go at ALL because the grant would never have covered it and there were no loans.

Everyone else gets into that kinda debt trying to make ends meet - mostly through having paid so much money in bank charges to cover for those lazy, work-shy beer-guzzling brats who don't really want to face the real world.

My heart bleeds - and so will my bank account thanks to those students.

re: Muneer

The term may mean something else in the US, but this is refering to an arranged overdraft facility - the bank has agreed in advance to give the customer a certain amount of overdraft interest free.

Most banks keep this interest free for 1-3 years after graduation, so they can get a job and pay it back.

HSBC thought they'd be clever and charge interest straight away, before they could possibly have paid it back.

@ Free overdraft? WHAT?

The difference between US and UK banking charges is quite striking.. In the states you have to pay a monthly fee for your current account and you get no interest on the money in there. As you say, you will be charged a fee for as much as speaking the word overdraft to your bank.

In the UK your current account is free and you would expect to get paid interest to keep your money there. Pre-arranged overdrafts don't incur a fee, although they do charge you interest on the amount you owe (and the rate isn't usually that bad either). As an incentive to stay with the bank after graduating, students don't even pay interest on their overdrafts.

Banks in the UK do tend to be a bit evil with charges, but compared to US banks ours are like fluffy kittens that bring you gifts (and nice ones like chocolate, not dead sparrows).

It's amazing thing what having a healthy amount of competition can do...

Also, the customer service from the US bank I used was just as incompetent as I would expect from a UK bank (only ruder).

Take a closer look

> "Following the feedback from our graduate account holders, both directly and via the NUS, we have taken the decision to freeze interest charging on 2007 graduates overdrafts up to £1,500," HSBC said

They are only freezing interest charges on graduates with overdrafts of £1,500 or less, which I imagine that is the minority of their graduate account holders.

Get real lads

Good god. The posters so far don't seem to understand the issue.

Students are given interest free overdrafts so banks get their business. Many students are stupid enough to go over the agreed free level and incur lots of charges. Others however are clever enough to use the system effectively and treat is as the safety net it is.

All other banks ween students off this overdraft by taking the level of 0% lending down each year. I.e. when you leave uni, your student account becomes a graduate account. Over the next 5 years (or similar) your interest free overdraft is eroded. HSBC have chosen to cut it out full stop as soon as they leave uni. Does this not strike you as a sneaky way for them to screw money out of people when it goes against the trend of the industry?

To be fair...

To be fair to HSBC, they never charged me anything even when I went £1400 below and I couldn't have managed otherwise. Even after I left uni, I went straight into being self-employed and really struggled to begin with. They still never charged me anything. This must be a new thing they've introduced. They haven't removed my overdraft facility yet but I'm not sure what would happen if I went into the red now. Thankfully I'm quite safely in the black these days.

@Really?

Swan off around the world? I haven't had a holiday in 4 years since I left uni, whilst I was there I was running my own business as well. No one I was at uni with went swaning off around the world, they all went in to jobs or looking for them, along with their £14k+ of student loan, and overdrafts. What HSBC have done, is to tell customers that they will have a £1500 free overdraft, which will be reduced by £500/year down to £0 free (But still £1500 limit) - then they've gone and changed the terms part way through, which isn't very decent of them.

@Take a closer look

For most students with HSBC they would have £1500 or less, £1000 initial then £250 additional per year of the course after the 1st. Mine was more but then I did a 4 year course.

Sick and tired

I'm sick and tired of this "Grow Up" attitude from some of the people here -

I am a student and i work damned hard, i will leave with around £24k of student loan debt, hopefully without an overdraft as i work hard to ensure i don't go into it.

However, i have just started my placement year and in the process of finding somewhere to live i had to shell out about £2k in costs - deposit, first months rent, furniture, travel to the place to l was moving to.

There's no way i could have done that without having an overdraft there, the situation is going to be much the same when i graduate - i will need some buffer in order to get started in a new job - that's if i can find one, most of the people i know (most of which have 1st's in BSc's for Comp Sci/Engineering/Electronics type degrees) take around 12 months to find a job - simply because the field is so competative.

The one year buffer of interest free up to £1k i think is acceptable, and highly useful to allow us "lay about students" to get jobs without being forced to move back home and get a sub-standard job just because it allows us to live back with our parents.

However, i did not get offered thousands of ££ immediatly for my overdraft, i got £200 automatically on becoming a student, then i had to physically go to my bank and apply for up to £1k, they refused to give me more than that, luckily i managed to get away with not needing it, but things were tight for a couple of months - i pretty much didn't leave my flat apart from to go to work.

Re: Sick and tired

>things were tight for a couple of months - i pretty much didn't leave my flat apart from to go to work."

You poor lamb. Welcome to the real world.

f*ck the anons!

I get so annoyed at people complaining that students have it easy, waste time and money and leech of the system..... it may have been the case 10 years ago, but not now.

Business and government have turned on students, they essentially push people towards university by claiming you can't get by without it - once in, the student loans company gears up to rape you using what is essentially lifetime-student-stealth-tax.... if I just let the student loan take the payments they do directly out of my pay then it wouldn't clear by the time I am retiring.... RETIREMENT?! I got out of uni in 2005, just before top-up-fee's were charged and I still came out with thousands of pounds work of debt BEFORE my student loan. And yes, I worked all the way through, and no - my parents could not help. I didn't drink every weekend, I didn't even go out most time... I just learnt all day, and worked all night and still came out with mountains of debt. I noticed the student loans company is actually advertising on television now?!?!! TV advertising.... that must ring alarm bells... a government sponsered fund to loan students money for top-up fees and cost of living (that replaced free grants btw) and they are advertising. It's a business... plain and simple... and a business that is geared towards making money for the government... I was being charged interest on my student loan (that was originally explained as interest-free when I was in college)... that interest actually is above my minimum payments until very recently when I started earning more than £23k!!

My big problem with this whole situation is people making out that uni is easy, and "just don't use the overdraft".... easier said than done without parents backing you up financially...

I now have a fairly decent job, but I'm still struggling to clear the debt after 2 years (it is going to take at least another 3).... at a time I should be enjoying some extra cash I don't... I cant get on the property ladder, I can't afford a holiday, and I can't afford not to pay it off either.

All the anon's who say layabouts/easyride/dontuseoverdrafts are just not living in the real world... at a time that families are getting heavily in to debt, how do you expect people to have to pay out full-living costs with part time jobs and still manage a full time education.... just grow up and shut the f*ck up about sh*t you don't know anything about.

To all those who are being rude about students:

Remember in the old days, when you got grants? THEN, it was just about possible not to get into debt. Not any more.

Law makes the point fairly crudely, but it's true - there is no way to avoid debt, unless you're relatively wealthy to begin with and you spend large amounts of savings. The student loan (yes, LOAN, not grant - some people apparently still don't know the difference) will just about cover accommodation. That's it. If you want to eat for three years, you have to use your arranged overdraft. There's absolutely no choice in the matter.

Grow up

Yes, I said it. Grow the fuck up. All of you students bitching about the people who are telling you to be responsible... Grow up. "Higher" education is a privilege, not a right. When I was of college-age, guess what? I couldn't go to college/uni. Why? I couldn't afford it. I wasn't rich, I couldn't get a loan, and my parents couldn't afford the cost. So I didn't go. I didn't expect anyone else to support my ass. I got a job and started working.

This isn't an I-couldn't-do-it-so-why-should-you case. It's a case of living within your means. I'm sorry if you're having a difficult time affording things while going to uni, I really am. I sympathize with you. But if it's that difficult, and you can't afford it, maybe, just maybe, you shouldn't be going.

And for the record, 14k pounds is a paltry amount to those of us in the states. In 1995, my guidance counselor was pushing me towards a $25k/yr school, which means I would have been at least $100k (what's that nowadays, about 50k pounds?) in debt. FFS, even UMass is somewhere around $20k PER YEAR now. And forgot Ivy League schools. You're talking closer to $400k there. $28k... I bet most of the U.S. students would kill for schooling that cheap.

@ A Solution To All Problems

"Why not go to college in the US and get a UK bank account? That way you can get a cheap education AND piss it all up the wall, like we did here in the 90s."

Perhaps because the 90's are over? And where's this "cheap education" in the US you're talking about?

Facebook and Free Overdrafts and Whiners

Just wondering whether you guys (the whiners) know anything about this news article before whining about students getting free overdraft?

HSBC decided June/July to send out the mail containing info about charging for overdraft for graduates when graduates were about to graduate. This left those people who were already in red pretty pissed off - guess how many there was in red because of the amount they have to pay through University?

Those corporate sh*theads probably think the same way as the whiners here and think students can be bullied.

This is a great f**k you as far as I'm concerned. Yes I was a student and I just graduated, I got in the red even though throughout my University life I had worked part time and I don't even drink! Do you know how much rent cost for accommodation alone? It cost £400-£500 per month per person! When you take into account the "loan" we get which is £4k per year it is just horrendous and don't forget that £3k tuition on top.

Anyway, those who're fed up of those complaining about students, I'll just say this to you guys: you know better not to reply to immature morons who didn't get a proper education and complain.

I don't have a penny to start off with before I went into Uni, so being poor and not being able to "afford" to go to University is bulls-, and over the past 4 years I've stacked up a total of £20k+ of loan debt which I'll now have to pay back little by little for the rest of my life. Anyway, you whiners should stop spreading your own problems to others and go sort your own problem out.

They don't even observe their own small print...

Re comment from "Overdraft vs Overdrawn":

"They have been giving students large interest free overdrafts for a many years now."

Oh no, they haven't: my son changed his "You cannot overdraw" under-18 account to a Student account once he had turned 18... he has been charged £75 (this fee doesn't even appear on the Web site charges and fees list) for being just over £200 overdrawn for ONE night... a phone query to the bank a few days later confirmed that "we won't charge you on this occasion..." - a few weeks later the £75 fee was slapped on, wiping out his account balance so he couldn't even withdraw the £40 or so that was in it at the time.

We got nowhere with letters to the bank so we have started County Court proceedings under the Small Claims Track to get the £75 back, but of course these proceedings have now been "stayed" until after the conclusion of the OFT proceedings, next year.

So HSBC Bank isn't even keeping to the terms of the account as they were, far less pulling a fast one with the latest attempt to screw their customers by changing the rules ... :-(

If only we the days of decent employment with no education were still upon us...

I am a student. In Canada.Luckily for me my tuition is about $3200 CDN, roughly 1200 Pounds? Or $3100 USD per year.

I wish we lived in a time like the 60's and 70's where you could find a company and get a nice unionized job with F*ck all for schooling, work 30 years with job security, and retire to a nice pension having had our 2.5 kids, and nice house wth 2 cars.

However, we don't live in that world. We live in one where a high school diploma might just be useful as toilet paper.Post secondary is almost as necessary as arms and legs to get a job (although hiring practices legislated by governments makes it easier to be financially stable without them)

When the mine in the town I grew up in was hiring in that storied time period (much into the 80's even) simply being fit and alive meant you could get a nice union post making very good money. Schooling? didn't matter.

Now? Good luck.

Students get bashed about for many things, some of which I am sure we deserve, some we do not. The truth of the matter is that many of us lazy, lay about students wish we lived in the environment our elders did. Most of us simply want some of the security of a steady decent paying job that our parents had.

Too bad for us that to get one now requires a pile of debt be incurred first. It is the membership fee for the right to be decently employed. I'm glad to hear many of you folks didn't have to pay it. It's a shame we do. After hearing of most of your tuition woes, I am glad I live here. We too have a problem with student debt, but rarely is it as high as the U.S Poster who claims roughly 100k for a 4 year degree. I think our average is around 20-25k CDN.

Put into other terms, the money most of you older peeps bought and financed your houses with, we are having to spend upon our piece of paper which entitles us to a lifetime of decent work and renumeration which most of you were handed as a birthright in the heady days a couple decades after the Post WW2 boom.

Obviously we have quite a generation gap at play here.

So if u don't like it, kick up a mass social network blame war and u call urself educated??

There is no loan/overdraft should be interest free. The interest should be much lower than commercial rate but not big flat zero.

The point of being is to learn the consequence before you seriously decide to sign up one. If you are able to achieve a higher education, then you should be able to make this kind of responsible decision.

What if some of these graduates got a good job in the city and later in their life make bonus, buying their first flash car, going their first holidays? Should they pay back the interest first?