Internet-Powered Boycotts Beat Corporate America

In last week’s column I urged readers to declare electoral independence by boycotting the political parties and dropping all partisan affiliation from their voter registration cards. Though I didn’t know it at the time, I was riffing on a theme. Two weeks earlier, my wife and I had initiated our own mini-boycott, this of a more personal nature, when we learned that Bank of America would start charging us five dollars a month for the privilege of spending our own money.  The bank’s decision to levy a monthly fee for debit-card use wasn’t especially surprising. This was the same institution, after all, that foreclosed on a woman who wasn’t even behind on her mortgage, locked her out of her home for a week and—just for good measure—held her parrot hostage (and some people wonder why I find corporations so fundamentally creepy).

In the case of the fee, BofA was responding to new regulations that would place a cap of 21 cents on the interchange fees banks can charge merchants for accepting debit cards. Never mind the fact that they once paid those same merchants to accept the cards because they are far cheaper to process than checks and carry less risk than credit cards.

In what must have seemed like a good idea at the time, BofA made the decision to shift these operating costs to consumers; it’s kind of like a pizza delivery guy showing up with your food and then asking you for gas money. Needless to say we weren’t the only customers to hit the roof. In our case the solution was simple: By the end of the week we’d stopped our direct deposits, canceled our automatic bill pay and transferred the money in our checking account to a different bank (we chose Citizens, not out of any special affinity for the color green, but simply because I had an existing account there, and they assured us they had no intention of charging us to use our debit card). For now at least, that was enough for us. What I didn’t know at the time was that our little protest was rolling like a wave across the country, the stentorian howl of collective dissent gaining in volume as it went. Its source: a 22-year Bank of America customer from Washington, D.C. named Molly Katchpole. Her vehicle: a (previously) little-known website called change.org.

Launched in 2007, change.org is an online advocacy platform that allows users to register their causes, lobby public support, and deliver signed petitions to the target of their protest. The site features hundreds of issues, ranging from the highly personal, like the petition—signed by 153 people—beseeching immigration officials to release a man named Josue Fernando Cervantes Castro from detention in Georgia, to issues of national import, such as the campaign lobbying for the withdraw of the execution warrant against Hank Skinner—a Texas inmate who is scheduled to die on November 11th despite the existence of DNA evidence that could potentially clear him.

Katchpole’s petition urging Bank of America to withdraw its debit card fee—and prodding disgruntled depositors to boycott the bank—ran like wildfire through cyberspace. On October 6th, just days after launching her campaign, Katchpole was able to deliver more than 150,000 signatures to her BofA branch. While she was there she withdrew all her money (a total of $400) and cut up her BofA ATM and credit cards in a show of defiance before a gaggle of television reporters.

For those who don’t know the rest of the story, on Tuesday, less than a month after Katchpole started her campaign (and after gathering more than 300,000 signatures), Bank of America announced that it was backing off.

“We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” David Darnell, BofA’s co-chief operating officer, said in a statement. “As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”

Four other banks—Wells Fargo, JPMorgan Chase, SunTrust and Regions Financial—said they too will withdraw plans to charge customers for using their debit cards.

Bank of America wouldn’t say how many customers it lost as a result of its ill-fated experiment (I can vouch for two). But credit unions and smaller independent banks have been reporting an increase in new accounts since the end of the summer.

Reflecting on her month-long campaign for the Guardian newspaper on Wednesday, Katchpole said she was as surprised as anyone by the response her protest elicited, and she encouraged consumers to draw an important lesson from her success:

“If my experience this past month tells us anything, it’s this: David can still conquer Goliath. Regular people can take on the most powerful of institutions. With enough determination, we can, against all odds, make a difference.”

That’s an important lesson, and one that has been played out many times before. Indeed mass boycotts (or threats of boycott)—much like general strikes—can and do move mountains. Perhaps the most famous American boycott, the one launched in 1955 against the public transit authority of Montgomery, Alabama, gave birth to the civil rights movement and signaled the beginning of the end of Jim Crow in the South. Using printed flyers, word of mouth and, eventually, the attention of the national media, it took 381 days of biking, carpooling, walking and riding the occasional horse for the black protestors to succeed in their mission of ending segregation on city buses and trolleys.

Using the Internet, it took Katchpole less than 30 to move a multibillion corporation. The lesson here is simple: When used effectively, the Internet is the H-bomb of public dissent; and boycotts are its shock waves.

At the end of the summer, when Netflix announced it was raising prices for DVD rental by 60 percent and spinning off the service into a separate entity called Qwikster, outrage quickly multiplied. Within hours, CEO Reed Hastings’s blog posting announcing the move had generated more than 17,000 comments lambasting the proposal. At least one analyst underestimated the blowback.

“We have to take what we’re hearing through social media with a grain of salt,” he said. “It’s easy to confuse the noisy with the silent majority.”

That statement proved to be a gross miscalculation; subscribers were fleeing in mass protest. It took just three weeks for Netflix to change its mind about Qwikster, and for Hastings to issue his mea culpa. “I messed up,” he said. “I owe everyone an explanation.”

By the end of the quarter, 800,000 subscribers had dropped the service, driving Netflix stock down 27 percent.

Which brings us to 27-year-old Kristen Christian, who—around the time Katchpole was launching her campaign against BofA—started a Facebook page urging consumers to undertake a mass exodus from the big banks to smaller institutions or credit unions. The day of reckoning is set for November 5th. As of Wednesday the event had more than 70,000 confirmed participants on Facebook, and untold numbers of unofficial supporters. And it’s been getting all kinds of media attention.

Anyone who needs convincing of the power of the consumer need only reflect on these few examples. Determination and commitment are indeed key ingredients of any civil action, but as Molly Katchpole proved, so is having a clear demand. The protestors camped out around the country as part of the Occupy movement can draw a lot from this lesson, and from Katchpole’s use of the Internet to stir up a mass movement. What it proves is that a single anonymous person with a cause and a Web connection has as much, if not more, power than thousands of individuals carrying signs in a public space. Perhaps we need both forms of protest; but after reflecting on the success of Katchpole these past few days, I’m more convinced than ever that what is lacking from our most recent popular uprising is a clear and convincing target for some next-generation cyber-activism.