ASA Adjudication on HSBC Bank plc

Ad

A TV ad for HSBC Bank Account Plus opened with a voiceover saying "Who's on your banknote?". The ad then featured six people from different countries holding up their local currency. The voiceover went on to say "Whoever's on the banknotes with Bank Account Plus you can withdraw them worldwide and we won't charge you". Text running at the bottom of the screen read "Plus costs £12.95/ month (£6.47 month for the first 6 months for new customers until 09.06.07). Withdrawals from Cirrus / Maestro ATM's worldwide, free from HSBC transaction fees. Minimum 12 month term. Some Cirrus / Maestro members may charge fee. You will be advised on screen. HSBC Bank plc. Lines open 8am - 10pm. Calls recorded".

Issue

The Nationwide Building Society challenged whether the ad was misleading because HSBC levied a charge of 2.75% on currency conversions when withdrawing from cash machines abroad, and therefore customers were effectively having to pay for using their cards abroad.

BCAP TV Code

Response

HSBC Bank plc (HSBC) said they did not charge any separate transaction fee for their Bank Account Plus customers when they used their debit card to withdraw cash from an overseas ATM. They said they charged their standard Bank Account customers an ATM transaction fee of 1.5% (min £1.75) of the total sterling value of each withdrawal they made from an overseas ATM. HSBC stated that, as the action of withdrawing cash from overseas cash machines did not attract a charge for Bank Account Plus customers, they did not believe the claim "withdraw them from cash machines worldwide and we won't charge you" was misleading. HSBC explained that they applied an exchange rate to any foreign exchange transaction. They said the HSBC exchange rate was the daily rate advised by the Mastercard International Exchange Rate scheme with a 2.75% adjustment. They explained that that rate covered the handling costs and card processing fees incurred by HSBC in processing the transaction.

HSBC stated that, in order to comply with Banking Code requirements, they disclosed the calculation method of the exchange rate on customer statements and provided details to customers in their Price List when customers opened an account with them. HSBC explained that, unlike for standard Bank Account customers, it was cheaper for Bank Account Plus customers to withdraw cash from an overseas ATM than to purchase foreign currency in a UK HSBC branch.

The Broadcast Advertising Clearance Centre (BACC) explained that they had sought confirmation from HSBC regarding charges and fees before approving the ad's claim for international withdrawal without charge. They said they had initially been cautious because they presumed there would be a foreign exchange fee even if the actual withdrawal from an overseas ATM was without charge. The BACC stated that HSBC had assured them that they would cover all local bank and foreign exchange rates. The BACC said they were concerned about the possibility that a local bank somewhere in the world might suddenly decide to charge customers a fee for ATM withdrawals, and that there would be a delay before HSBC would be able to cover the costs incurred. They said the on-screen text had been amended to make it clear that, should an overseas local bank levy a fee, customers would be advised at the time of withdrawal. The BACC explained that they had not asked HSBC how they calculated their exchange rate because they believed they had made it clear to HSBC that no charges or fees must be levied in order for HSBC to make the claim.

Assessment

Upheld

The ASA noted that HSBC did not charge Bank Account Plus customers an ATM transaction fee when using their debit card to withdraw cash overseas. We also noted that HSBC had made it clear in the on-screen text that local banks might levy their own charges and that customers would be notified of that at the point of withdrawal. We noted that HSBC applied an exchange rate to all foreign currency transactions and that that rate covered the handling costs and processing fees of the transaction. We acknowledged that HSBC provided details of the exchange rate and its calculation to customers when they opened their account and also on their bank statements. Nevertheless, we considered that the 2.75% adjustment made by HSBC was essentially a transaction fee that would be charged to the customer. We considered that the claim "we won't charge you" was an absolute claim, and that Bank Account Plus customers could reasonably expect the exchange rate fee to be waived by HSBC. Because there was no mention of the exchange rate fee in the on-screen text, and because we understood that cash machine withdrawals from overseas ATMs always incurred this charge, we concluded that the ad was misleading.

The ad breached CAP (Broadcast) TV Advertising Standards Code rules 5.1 (Misleading), 5.2.2 (Implications) and 5.2.3 (Qualifications).

Action

We told HSBC not to repeat the ad in its present form.

Adjudication of the ASA Council (Broadcast)