Called to Account

High street banks have been hit by a huge wave of public anger at plans to charge up to £2.50 for cashpoint transactions. Front page headlines in the national press, such as “Greedy Greedy Greedy”, were followed last week by calls for a boycott of cash machines and bank services.

The proposal – that banks should charge non-customers for using their ATM machines, on top of a “disloyalty fee” some already charge their customers for using another bank’s cashpoint – came out of a meeting of the all-powerful Link cash machine network.

And although the banks have striven to distance themselves from the furore, there are signs that the public wave of protest will not subside quickly.

Labour MP Martin Salter, who is setting up an all-party group on community banking, believes the banks could now become the target of the kind of consumer boycotts which have hit car makers and GM food producers.

He says: “I think the financial services industry is crying out for direct consumer action. Something needs to be done about the worst practices of some in the industry.

“I could see a situation where we, as a committee, would be targeting a different issue each month, whether cashpoints or the reduction of branches in rural areas. We could encourage people to boycott services and not use certain banks,” he adds.

The current trend towards boycotts in the UK owes much to a change of tactics by the major campaign groups.

Chris Kronick, director of Greenpeace’s anti-GM food campaign, says: “It is no longer adequate simply to say to a company that there is a problem and it must stop.

“Unless you can offer an alternative to the problem people get pretty fed up. We always try to show that there is an alternative.”

The anti-GM campaign largely succeeded in removing GM food from supermarket shelves, with a twin-pronged approach designed to grab headlines and win over retailers.

So, while white-gowned crop raiders provided dramatic footage for the media, Greenpeace officials worked quietly behind the scenes with the supermarkets to help them source non-GM produce.

Consumer pressure

Supermarkets are better-placed to respond to consumer pressure than food producers. One anti-GM campaigner says: “It is possible to hit producers in the pocket by affecting sales of their products. All the supermarkets have to do is remove the products from their shelves, as many of them did with GM food, and they look like the consumer’s champion.”

The Consumers’ Association (CA) succeeded in hitting the retailers and the producers in the pocket in its fight against inflated new car prices.

The campaign began conventionally enough last June, with CA director Sheila Mckechnie parking a Union flag-bedecked Ford Focus, complete with a Great British Rip-Off logo, outside the headquarters of the Society of Motor Manufacturers & Traders to hand-deliver a copy of the campaign leaflet.

But the CA then took the unprecedented step of going into competition with the car dealers, helping potential buyers to import cars from the Continent, where they are an average of £3,000 to £4,000 cheaper.

The association even managed to set up a stand at October’s London Motor Show, the motor trade’s heartland, where it took enquiries from 18,000 potential customers.

Jenny Driscoll, the CA’s press officer, claims victory is in sight. “People are holding off from buying a new car until the prices come down. Sales for December are down by 12 per cent and by 11 per cent for January.”

But campaigners may find the High Street banks a harder nut to crack.

Any boycott of hole-in-the-wall machines would not so much damage the banks as play into the hands of the supermarkets, which since the Eighties have offered cashback facilities, allowing customers to draw cash on their credit or debit cards as they pass through the checkouts.

Even before last week’s furore, Sainsbury’s was calling for an end to the £50 ceiling on cashback, which is imposed by the banks. The grocery retailer even threatened to ban cash machines from outside its stores if the banks started charging for withdrawals. A Sainsbury’s spokesman says: “There has been a big increase in cashback transactions since Link made its announcement and we welcome that.”

But some campaigners question the effectiveness of a cash machine boycott.

Inconvenience factor

Steve Syder, an IT consultant and former Conservative parliamentary candidate, believes other methods would be more effective. Syder was so incensed by the Link move that he set up his own Internet-based campaign, Pennypinchers, to hit back at the banks’ alleged greediness.

He is encouraging people to write at least five cheques to friends dated April 1, to the value of one pence. The idea is to pay the cheques into the bank on Monday April 3, causing them maximum expense and inconvenience. “I would imagine a boycott is exactly what the banks want – consumers would stop using other banks’ cashpoints.

“It is a lot better to inconvenience the banks. We want them to sit up and take notice of ordinary customers. They have gone too far this time.”

One of the prime movers behind the Link announcement, Barclays, is no stranger to boycotts, having spent the first half of the Eighties facing protests over its financial stake in the Apartheid regime in South Africa.

But the campaign, which eventually led to a withdrawal from South Africa, was largely confined to students and the politically active.

The British banks have yet to face a widespread revolt by ordinary customers over their perceived greediness – and the prospect must be a worrying one.

A Lloyds TSB spokesman told Marketing Week: “Since the Link announcement, we have had a number of customers wanting to know our position. We’re disappointed that Link agreed to allow banks to levy a surcharge on non-customers.”

HSBC, which like Lloyds has yet to determine its pricing policy, also expressed regret at the outcome of the Link meeting. A spokesman says: “The issue of cashpoint charges is very emotive.”

It remains to be seen if the public will mobilise against the banks in the way predicted by Salter and other campaigners. But the ferocity of last week’s reaction – both in the press and from customers – shows the seeds of revolt could have been sown.