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!
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, PenaltyCharges.co.uk, 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?
Housing Armageddon from The Economic Collapse :- Approximately 11 percent of all homes in the United States are cenrurtly standing empty.- The rate of home ownership in the United States has fallen all the way back to 1998 levels.- Many economists are now openly using the term double-dip to describe what is happening to the housing market.- The number of homes that were actually repossessed reached the 1 million mark for the first time ever during 2010.- According to RealtyTrac, a total of 3 million homes were repossessed by mortgage lenders between January 2007 and August 2010. This represents a huge amount of additional inventory that somehow must be sold.- 72 percent of the major metropolitan areas in the United States had more foreclosures in 2010 than they did in 2009.- According to the Mortgage Bankers Association, at least 8 million Americans are at least one month behind on their mortgage payments.- It is estimated that there are about 5 million homeowners in the United States that are at least two months behind on their mortgages, and it is being projected that over a million American families will be booted out of their homes this year alone.- Deutsche Bank is projecting that 48 percent of all U.S. mortgages could have negative equity by the end of 2011.- Some formerly great industrial cities are rapidly turning into ghost towns. For example, in Dayton, Ohio today 18.9 percent of all houses are now standing empty. 21.5 percent of all houses in New Orleans, Louisiana are standing vacant. (Everett, WA is fine in comparison!)- According to Zillow, U.S. home prices have already fallen further during this economic downturn (26 percent) than they did during the Great Depression (25.9 percent).- There are very few signs that the employment situation in the United States is going to improve any time soon. 4.2 million Americans have been unemployed for one year or longer at this point. While there has been some nominal improvement in the government unemployment numbers recently, other organizations are reporting that things are getting even worse. According to Gallup, the unemployment rate actually rose to 9.6% at the end of December. This was a significant increase from 9.3% in mid-December and 8.8% at the end of November.Why the long faces consumers? As GW Bush would say, Git out there an go shoppin! Looks like the gutter consumer confidence is rolling along is on the roof of a house.
Posted by: Carmen | September 17, 2012 at 05:09 PM
People should read this.
Posted by: Natasha | October 21, 2008 at 08:57 PM
Rob,
The evidence I've seen so far suggests not being upfront and honest is a very dangerous road to go down. Its not exactly in line with what you said, but Wal Mart gone in a huge mess in the USA by creating with their PR agency a blog that was supposedly an average couple touring the US and visiting Wal Mart stores, singing their praises. When people found out it was "staged", all hell broke loose.
The same thing could happen if a company set up an anti-competitor site, without being up-front...the backlash would be huge when they eventually got found out.
A better route I suggest is to shout about what is good...or, even better, create a product/service where users/fans shout about it.
Posted by: David Taylor (brandgym) | March 06, 2007 at 08:17 PM
I wonder when companies will begin to use sites like penaltycharges to better their own branding by belittling/criticising their competitors?
While i don't condone it, do you think that this form of bashing through viral marketing would be effective?
I hate to say it, but i think that it would be - as long as the "followers/readers" didn't catch on it was sponsored by a competitor.
Your thoughts?
p.s. i know that there are libel laws and that there's a fine line between criticizing through facts and defaming through lies, i just wanted to spew my thoughts to see if anyone agrees/disagrees/thinks i'm a loon.
Posted by: Rob | March 06, 2007 at 05:03 PM