HSBC executives may well be patting themselves on the back for a job well done following the bank’s recent announcement of a 32 percent increase in third quarter pre-tax profits to US$6.1 billion. On the other side of the coin, the bank’s long-suffering retail banking customers have slightly less to cheer about.

Readers may recall a recent article on this website which recounted the almost surreal experience of a customer who unsuccessfully attempted to open a joint account at HSBC. In the wake of this, another irritated customer contacted HowardWinnReports recounting the exhausting ordeal she had to go through to take out a personal loan with HSBC – the bread and butter of retail banking, or so you would have thought.

Photo: HKFP/Pixabay.

The customer, whom we shall call Stella, recently decided she wanted a personal loan. She was specifically looking for a low interest tax loan that many of the banks offer at this time of year. Since most of her banking is with HSBC she took her enquiry to several branches and asked her relationship manager when the promotion was likely to start. No one apparently could help and so she applied online for a personal loan. About an hour after this HSBC then announced on its website that it was offering tax loans.

Stella contacted HSBC’s personal loans department and said she wanted to switch her personal loan to the lower interest tax loan. It was impossible to do this, she was told by several people at HSBC, without incurring a penalty. She then phoned HSBC and enquired about taking out a tax loan. After being told the terms she said, “I have a problem in that I have just taken out a personal loan at a higher interest rate. What can I do about it?” To her surprise, the woman from HSBC told her there was no problem and that she could cancel her personal loan because there was no penalty to do so within the first 30 days. She could then apply for a tax loan. The only difficulty was that she would have to go to a branch to do this.

HSBC. Photo: StandNews.

So earlier this week Stella went to a branch near Central and explained her situation. The woman she spoke to said it would be impossible to cancel the loan without paying a penalty. Stella insisted she could. The woman rang the loans department and was told she could not. Stella rang the loans department and pointed out she was told she could. The personal loans department insisted she couldn’t. The woman at the branch said the best Stella could do was write a letter to the complaints department detailing what had happened. She did this but before leaving the branch she asked to look at the form the bank would use to cancel a loan. The woman said she had never used the form and it took her about ten minutes to find it on the bank’s system. To her astonishment there on the front page of the form it read, “30-day Service Pledge: If you need to fully prepay the Personal Installment Loan with our bank within 30 days from the date of drawdown, we will waive the early redemption fee of 2% of initial approved loan amount.”

With a sense of elation after about an hour of frustration at the branch, Stella pointed this out to the HSBC staff. To her amazement the woman who was attending to her immediately said, “That’s not right, you do have to pay the penalty.” She summoned two more colleagues who confirmed that this was indeed the case and said the 30-day service pledge did not apply to her. Despite the protestations of HSBC’s staff, Stella filled out the form and when it came to the section which asked why she was cancelling, she ticked ‘not happy with the banks service and the rate of interest is too high’. At this point, Stella says a male member of the bank’s staff grabbed the pen out of her hand and crossed out these reasons, writing “others” and alongside it “cancellation” instead. He told her she had not understood the form correctly. Stella admits she was beginning to feel somewhat hysterical at this point and told the man he was wrong. “The bank wants to know why I am cancelling the loan,” she said, before telling him to back off. She demanded another form which she filled out before leaving the branch.

The next day she received an email from HSBC inviting her to participate in a “customer satisfaction” survey. “You have to be kidding,” was her only thought. The same day she received a call from a woman in HSBC’s personal loans department who had been one of the first to tell her she could not cancel the loan without incurring a penalty. She had rung to ‘confirm’ that Stella couldn’t cancel the loan without paying a penalty. Stella pointed that she could and she had done so. “But that’s impossible,” the woman said, “you can’t do it.”

People walk past a branch of HSBC bank in central London, Britain June 09, 2015. Photo: Reuters/Neil Hall

So of about eight people at HSBC who Stella spoke to about the loan, only one who was involved in promoting tax loans, seemed to be aware of the bank’s 30-day service pledge. Indeed Stella’s overwhelming impression was that a lot of the staff seemed to have an investment in her not cancelling the loan and seemed to relish her apparent entrapment in her loan commitment.

When HowardWinnReports asked HSBC if staff were incentivised on the basis of their sales performance a spokesman replied in a statement. “In 2013, HSBC introduced a global incentive scheme for all customer-facing staff in Retail Banking and Wealth Management, including those in Hong Kong,” it read. “The new scheme aims to reward our staff on client experience, sales quality and values measures in a globally consistent way by removing all product sales incentives.”

He also said that the bank had launched its 30-day service pledge in May 2012. In a News Release by HSBC when the pledge was launched, Diana Cesar, HSBC’s Hong Kong CEO who was then Head of Retail Banking and Wealth Management for Hong Kong said, “A first of its kind service in Hong Kong, our 30-day Service Pledge programme offers our retail customers extra peace of mind when they make their financial decisions, as well as the flexibility to adjust their wealth management plans according to their changing financial situations.” She went on to say, “Our research found that the majority of customers (81%) believe that a service pledge strengthens their confidence in products and 90% of respondents are satisfied with a 30-day guaranteed fee refund or waiver period. Our new programme also reflects our confidence in our financial products.”

This is all well and good, but if the programme is not understood by the bank’s staff then, ‘that extra peace of mind’ evaporates the moment they step into one of the bank’s branches and have to battle with staff to implement the bank’s stated procedures. HSBC says it is investigating the incident.

Howard Winn

Howard Winn has been a journalist for more than 25 years working mostly in Asia. He was until recently Lai See columnist for the South China Morning Post, a column that focused on the lighter side of business and more. He was previously Deputy Editor and Business Editor of the Hong Kong Standard. His work has been published in the Far Eastern Economic Review, the Wall Street Journal, and the International Herald Tribune. His latest work can be found at