NEWS ANALYSIS: PR talk burns banks in ATM surcharge battle - Building societies gained a moral victory over the banks that charged consumers who wanted cash access. All it took was a little communication

Last week, as the year-long row over cash machine charges finally came to an end, the decision by high street banks to abandon customer surcharges and so-called ’disloyality’ fees for accessing funds was hailed as a victory for consumers.

Last week, as the year-long row over cash machine charges finally

came to an end, the decision by high street banks to abandon customer

surcharges and so-called ’disloyality’ fees for accessing funds was

hailed as a victory for consumers.



Certainly, the major high street banking brands have suffered prolonged

criticism from the media, pressure groups and Government alike. But how

did communications bring about this complete U-turn?



The impetus behind the campaigning came initially from the financial

community itself. Last July, when Barclays announced it planned to levy

a pounds 1 surcharge on non-customers using its ATMs, it was the

building societies, which made the greatest noise.



In September, the Nationwide Building Society highlighted the issue by

threatening to take Barclays to court. But the matter only really

grabbed public attention in the New Year, when objectors within the Link

network suspected that colleagues - led by Barclays - would introduce a

new set of charges by stealth.



Mutual organisations, such as the Yorkshire Building Society and the

Nationwide, responded by positioning themselves as the consumers’

champions. In January, the Nationwide sent headline-grabbing survey

findings to the media showing that 83 per cent of MPs and 91 per cent of

the public felt surcharges were unfair. ’It was an ideal opportunity to

show mutuality in action,’ says Nationwide media relations manager, Alan

Oliver.



As the campaign gathered more support, his organisation lobbied MPs,

briefed the media and helped consumer-focused journalists through the

maze of issues. ’We were keen to show that it was possible for a

customer to be charged with a pounds 1.50 disloyalty fee by their own

bank, plus a pounds 1 surcharge by Barclays for example, for the same

pounds 10 transaction,’ says Oliver, ’(which) struck a real cord with

the media.’



But the only really organised consumer voice came from the Consumers’

Association, which spoke out on anti-competition issues and lack of

disclosure. ’It wasn’t that Link was a non-transparent organisation,’

explains Which? press officer Kate Levine, ’but that it didn’t feel the

need to tell people what it was proposing to do.’



The Consumers’ Association prepared a detailed Q&A for a press briefing

on 23 February, with personal finance and consumer journalists from the

nationals. There, it explained why double charges would favour the big

banking networks and undermine customer choice. The association also

provided comment after each Link meeting and announcements by its

members. ’We even published the letter we sent to Link on 14 February,

explaining why we thought their proposals were anti-competitive,’ adds

Levine.



But the media is credited with much of the success in raising general

awareness of Link’s proposals. The FT and broadsheets, such as the Daily

Telegraph and the Sunday Times, covered the relevant issues in detail,

while at the forefront of whipping up popular support, were the Mail and

the Express.



’Fed up with being ripped off by greedy banks, we decided to mount a

major campaign to see if anything could be done to put the fat cats of

Barclays, Lloyds TSB and their peers on a diet,’ says Mark Townsend,

consumers affairs correspondent on the Express. Called ’Stop The Great

Bank Robbery’, the initiative kicked off seven months ago, backed by the

Nationwide, the Co-operative Bank and the Royal Bank of Scotland.



’I would say that if there had been no media outcry about the charges,

which subsequently alerted the public and fed back to us, then banks

would have just carried on regardless,’ says Townsend.



It certainly made the politicians sit up and take notice. Against a

backdrop of early day motions and damning evidence from the Cruickshank

review, Trade Secretary Stephen Byers was left with little option but to

voice his own condemnation of Link’s plans.



But if one side of the argument got its communications right, where did

the other go wrong? ’I think Barclays underestimated how strongly people

felt about being charged to access their own cash,’ says Louise Hanson,

senior public affairs officer at the Consumers’ Association.



Even Barclays admitted its timing was not great. With reports of a

pounds 7 million share option windfall for its chief executive Matthew

Barrett, and a new ’big’ advertising campaign, offset by the axing of

171 local branches, the bank was always going to lose public sympathy on

ATM charges.



In the fall out, the big banks’ reputations have not faired well, with

Barclays taking the most severe knock. ’The public has come away from

this with two perceptions,’ says Tony Langham, joint managing director

of Lansons. ’Firstly, that the banks were charging unfairly for ATMs in

the first place, and secondly, that one bank was being more unfair than

the others.’



But as HSBC wades into a mortgage war, and two new internet banks launch

offering customers interest on their current accounts, the big clearing

banks are not out of the woods yet.



As Langham says: ’There were some fundamental mistakes made, but it

shows how complex it is to balance competitive pressure with the

interests of shareholders, customers and an organisation’s standing in

society. You have to give all those audiences the same attention.’



Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in

Would you like to post a comment?

Please Sign in or register.