£25 charge on HSBC Graduate Accounts

adoy

After having retracted their decision to charge interest on overdrafts for graduate accounts, HSBC has sent letters to a number of graduate account holders I know of, stating that the overdrafts shall be maintained but that the review of the overdraft facility in itself will incur a fee of £25 to be taken in what works out to exactly 30 days from date of the letter.

So, having not asked for any such review they rely on apparent small print to levy this £25 charge virtually out of the blue; and they are giving nothing beyond what the graduate already has.

In practice what happens is that HSBC sends out a standard form letter to graduate account holders, stating their overdraft limit and for this service they are taking 25 quid. I seriously wonder whether any actual review takes place at all, and if so what it entails and what its criteria are.

Where else but HSBC can you earn 25 quid for a print-out of a letter, an envelope with a bulk mail rate prepaid inkstamp imprint?

adoy

From the lack of responses one can assume that all those with HSBC graduate accounts are content to pay the 25 pound administration fee and that there will be no such objection or uprising as there was in relation to the attempt to levy interest on the same accounts?

amz84uk

I've received a letter this morning from HSBC stating that my "existing Overdraft Facility has been reviewed". It doesn't mention anything about any charges though, so not sure where the £25 comes from.

I have been happy with HSBC, but they recently begun charging my interest on my Overdraft, even though it was free for me as a Graduate. My overdraft has been set to £1750, at a rate of 9.9% though. I am sure that the overdraft is free for graduates, but will double-check this.

Samjm000

I have spoken to an operator, and apparently the only way around paying £25 for basically ... nothing, is to close your account. Although in time and effort it will probably cost more to change over all standing orders and direct debits ect. before the 30 day period has expired, both myself and everybody I know who has this letter is going in to close there accounts.
It is a matter of principle more that anything else.
I have been tempted to write an invoice to HSBC, as my telephone conversation with the operator took approximately 15 minutes, I will charge £30 per minute for my time, which leaves them owing me £450.

It's close enough to what they are charging me for... an unsolicited, and unwanted service, that is grossly overpriced.

suzw

The backtrack from HSBC re overdraft charges on graduate accounts was not a backtrack, it was pulling the wool over the SU's eyes. I rang HSBC re the 9.9% interest and the 25pound charge and was told the I could have an interest free OD upto 1500 if I switch to a graduate plus account. Guess what, the plus account costs 10quid a month. first three months free so a bargain I guess. They have lied outrageously and I want everyone to know it. DO NOT OPEN AN HSBC STUDENT ACCOUNT IF YOU ARE A NEW STUDENT,

The press release from HSBC was as follows:

"Like any service orientated business we are not too big to listen to the needs of our customers. Following the feedback from our graduate account holders, both directly and via the National Union of Students (NUS), we have taken the decision to freeze interest charging on 2007 graduates’ overdrafts up to £1500 and refund any interest charged in August. We are also pleased that we will be working with the NUS to enhance our new account offer so that it fully reflects the needs of recent graduates".
Andy Ripley, HSBC’s head of product development

amz84uk

I still don't understand where the £25 review charge comes from. Does anyone have a link to it? I've recently had my review (which to be honest, is a standard template letter over 5 pages), and no mention of any £25 charge on there though.

SkintButTrying_2

My god thats terrible, i just had my graduate account changed back to a student account (doign another year) so hopefuul i will have avoided this. Bloomin HSBC!

Rhia

I recently had my graduate account reviewed after graduating on the 18th July 2007. HSBC stated they no longer wished to provide me with an overdraft facility and have given me until 16th October to pay my overdraft of -£1487! They dated the letter exactly a month before but I did not receive it until the other day. They are basically asking for their money with practically no warning or time. They are offering me a repayment scheme of 1/3 of my disposable income, but as I am currently unemployed they will not set up a scheme for me. They have given me less than 2 monthes since graduation to 'find my feet'. I have been with the bank for over 5 years. Any suggestions what I can do?

CrispyUK

You might want to look at opening a graduate account with another bank - I think RBS and Lloyds TSB are supposed to be quite good but check around then you can use the new account to pay off your HSBC overdraft and close that account (or convert to a regular account).

amz84uk

Just had a letter this morning from HSBC stating that my overdraft is actually interest free upto £1500, and not 9.9% as they mentioned, due to HSBC listening to its customers/graduates, and acting upon it. They also say that they are working closely with NUS to enhance the Graduate Service experience.

Basically, they've backtracked and no mention of £25 review fee, or any overdraft charges up to £1500 :-)

Think HSBC knew that they would lose a huge chunk of the market share to the other banks if they started charging graduates and losing graduates, as its us students/graduates who will keep banking with banks that provide us with good offers/service, etc.

HannaB

I have been made aware of further instances where you are charged £25 on a graduate overdraft...when you try to pay it back!!

A woman from HSBC felt my wrath on Friday morning. A charge of £25 was shown on my internet bank for Overdraft Administration. I am a 3 year grad and I previously had my full student £1500 overdraft, but the interest-free portion was reduced to £500 in July. This would mean that I would be paying £10 a month in interest just for having a current account with an overdraft (and on top of this, they tried to sell me the grad plus account...that lady felt my wrath too!!). To reduce this interest, I reduced my overdraft twice, once in July and once in August, taking the amount down by £250 each time so the full overdraft is currently £1000. The lady explained that this £25 charge was because I had made two changes to my overdraft in the past 6 months! I let the woman know my intention to make a further reduction by £250 in October (paying the debt off in managable chunks to get back down to zero and remove the overdraft facility completely), and she told me that I would be charged £25 again! And a further £25 each time I did it!

Her solution, to try to spend less each month. I laughed at her. I live the South East and just about break even with the additional living expense.

My solution, stick the intentional extra payments of £250 in an Mini ISA until February 08 (after the 6 month period has expired). I'll pay 5 months of £4.80 in interest (on £1000), but I'll be able to pay more off in a bigger chunk. Hopefully drag it down to the interest-free barrier.

I'd appreciate anymore ideas.

Grads be warned...it was not good news to start a Friday

HannaB