The empowered consumer costs Banks billions

The growing consumer protest about exorbitant UK bank charges continues to pick up pace, and is a dramatic illustration of the power consumers now have to take on what they think is bad brand behaviour. I read about in last weekend’s Sunday Times. From one student’s complaint, the FT estimates the cost to UK banks could be as high as £10 billion!Picture_2_15

The whole thing started with student Stephen Hone being pissed off, as many of us have been, at being charged £32 on 2 occasions for going only 5p overdrawn. He called his bank, Abbey, to protest and after a while was told they would drop one of the charges as a sign of "goodwill". Well, Stephen was studying law, and found out that the bank was breaking contract law with an effective interest rate of 64 000%; turns out companies can’t make you pay "unreasonable" penalty charges, even if they are clearly written down. He took Abbey to court, and got £5000 in compensation. But he didn’t stop there. He set up a site,, to publicise his story and in doing so has helped a growing number of other ripped off consumers do the same thing, with over £1million won back through his site alone. A BBC investigation fanned the flames further.

This story is an example of what Jackie and Ben over at the Church of the Customer call "Citizen Marketers". Their book on the subject has loads of other great examples where customers have used the power of the internet, and in particular blogging and other "social networking tools", to fight back against crappy service and products. Such as the protest against poor iPod battery life that led to Apple setting up a battery replacement service.

And all this can only be good for the campaign to build brands on substance, not spin. Wouldn’t less money spent on advertising campaigns and logo changes would free up money to fix problems like these punitive charges?