The NUS has won a reprieve for those graduates due to be charged 9.9% interest on their overdrafts from this month. A campaign group on Facebook reached over 5,000 members and helped lead to HSBC freezing their plans.
HSBC allows students an interest-free overdraft of up to £1,500, however decided to charge interest on its graduate accounts a few months ago. This would have left graduates searching for a job with interest charges of up to £150 unless they opened a premium account, with a charge of £10 per month.
The bank will now be consulting with the NUS on ways to make its graduate account offering so it "fully reflects the needs of recent graduates". Many students and graduates had begun transferring their accounts away from HSBC.
NUS Vice President (Education) Wes Streeting gave a lot of credit to the use of Facebook, saying it allowed the national union to contact students far more easily than was previously possible. Ama Uzowuru, NUS Vice President (Welfare) said:
"We are pleased that HSBC has recognised that this policy would hit graduates just as they are at their most vulnerable. Students often struggle in low paid, insecure jobs upon graduation and the prospect of having the security of the interest-free graduate service pulled from under their feet is clearly unacceptable. Graduates are now more likely to be in debt than ever before.
NUS looks forward to future dialogue with HSBC about how their accounts can benefit students and graduates alike. Banks must realise that it is in their interests to support students while they are studying and after they graduate. We remain committed to ensuring that banks do not punish the increasingly indebted graduates of the future."
HSBC has not ruled out charging interest on the overdrafts, however its decision to freeze the introduction of interest and refund any charges incurred this month will take the heat off it for a while. A demonstration planned on September 4th outside HSBC headquarters has been postponed while HSBC reworks its account offering.