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Egg card complaints are referred to OFT
This is Money
10 February 2008
Complaints that internet bank Egg cancelled credit cards because holders always paid up in time has been referred to the Office of Fair Trading.
Egg sent letters to 161,000 of its customers this month, informing them their credit cards would stop working in 35 days.
It claimed that the customers, who represent 7% of its 2m credit cardholders, had a 'higher than acceptable risk profile'.
But many of those affected insist they always pay their bill off in full every month, never go over their limit and have excellent credit ratings.
It prompted speculation that the internet bank made the move because the customers did not make it enough money, something Egg denies.
But Labour MP and former consumer affairs minister Nigel Griffiths said he was 'in no doubt that is the reason' and welcomed the watchdog's involvement.
His initial complaint to the Financial Services Authority (FSA) has now been passed on to the OFT to decide whether a formal investigation should be launched.
'I am very pleased about that. It shows just how seriously they are taking it,' he said. 'I cannot tell you the number of complaints I have had - they just keep flooding in,' he said, promising to table a Commons motion demanding a full inquiry. Egg has said the move followed 'a one-off extensive review of its credit card book following the acquisition of Egg by Citi in May 2007'.
This is Money
10 February 2008
Complaints that internet bank Egg cancelled credit cards because holders always paid up in time has been referred to the Office of Fair Trading.
Egg sent letters to 161,000 of its customers this month, informing them their credit cards would stop working in 35 days.
It claimed that the customers, who represent 7% of its 2m credit cardholders, had a 'higher than acceptable risk profile'.
But many of those affected insist they always pay their bill off in full every month, never go over their limit and have excellent credit ratings.
It prompted speculation that the internet bank made the move because the customers did not make it enough money, something Egg denies.
But Labour MP and former consumer affairs minister Nigel Griffiths said he was 'in no doubt that is the reason' and welcomed the watchdog's involvement.
His initial complaint to the Financial Services Authority (FSA) has now been passed on to the OFT to decide whether a formal investigation should be launched.
'I am very pleased about that. It shows just how seriously they are taking it,' he said. 'I cannot tell you the number of complaints I have had - they just keep flooding in,' he said, promising to table a Commons motion demanding a full inquiry. Egg has said the move followed 'a one-off extensive review of its credit card book following the acquisition of Egg by Citi in May 2007'.
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