Is HSBC favouring its richer customers?

A recent report has suggested that High Street bank, HSBC, is giving more favourable treatment to its better off customers with its Internet arm First Direct than to its poorer HSBC customers. Officials claim that the customers of First Direct, who tend to be better off due to changes that were made by the bank a couple of years ago, are getting a far better deal than customers with its parent company, HSBC.

This is reflected in an announcement that was made by HSBC following the surprise October base rate cut of 0.5%. HSBC said that it would not be passing any of the rate cut on to its borrowers, but First Direct customers will receive the rate cut as well a receiving better rates of interest on their savings. Also, HSBC customers that do not pay in at least £500 a month to their accounts will only receive a quarterly statement rather than a monthly paper statement.

In addition HSBC has told customers that when they receive their new debit cards they will no longer be able to use them to guarantee cheques. Although the use and acceptance of cheques has diminished over the past couple of years, many people still like to pay by cheque for certain purchases, and this will restrict HSBC customers.

One industry official said: ‘First Direct is clearly targeting better-off customers and, in turn, they are getting a better deal than those at HSBC. Customers at HSBC must be wondering why those at First Direct are getting preferential treatment.’

An HSBC official said: ‘We do own First Direct, but it is also a competitor. When we make decisions about our standard variable rate we have to take into account the risks in the market at that moment. First Direct will make its own decision.’