Angry customers of internet bank Egg have hit out at its decision to cancel their credit cards.
Angry customers of internet bank Egg have hit out at its decision to cancel their credit cards.
Egg says 161,000 cards belonging to people whose credit profiles have deteriorated since they signed up will stop working in 35 days' time.
Egg says 161,000 cards belonging to people whose credit profiles have deteriorated since they signed up will stop working in 35 days' time.
But people who insist they have good records have been contacting the BBC to say they are on the list.
But people who insist they have good records have been contacting the BBC to say they are on the list.
A Labour MP is asking the banking industry watchdog, the Financial Services Association, to investigate.
A Labour MP is asking the banking industry watchdog, the Financial Services Association, to investigate.
Nigel Griffiths, a former deputy leader of the House of Commons, said Egg's action was "unacceptable".
Nigel Griffiths, a former deputy leader of the House of Commons, said Egg's action was "unacceptable".
A spokesman for the bank said those affected were customers it no longer wanted to lend to "regardless of their current status".
A spokesman for the bank said those affected were customers it no longer wanted to lend to "regardless of their current status".
Credit cards are being withdrawn from 7% of Egg's customers who it deems to pose an unacceptably "high risk".
Credit cards are being withdrawn from 7% of Egg's customers who it deems to pose an unacceptably "high risk".
We can certainly understand the concerns...but they are people we decided we no longer wish to lend money to Egg spokesman
We can certainly understand the concerns...but they are people we decided we no longer wish to lend money to Egg spokesman
This could include those who have missed repayments or exceeded their credit limit.
This could include those who have missed repayments or exceeded their credit limit.
'Arbitrary action'
'Arbitrary action'
Cardholders will be able to continue making minimum monthly repayments on their balances but will not be able to spend any more after the deadline.
Cardholders will be able to continue making minimum monthly repayments on their balances but will not be able to spend any more after the deadline.
The move follows a "one-off" review after Egg was bought by US-based Citigroup for £575m last year.
The move follows a "one-off" review after Egg was bought by US-based Citigroup for £575m last year.
The bank is not demanding immediate repayment of balances or making any changes to customers' terms and conditions or their interest rates.
The bank is not demanding immediate repayment of balances or making any changes to customers' terms and conditions or their interest rates.
The 35-day notice period starts on receipt of the letter, which also provides details of how to appeal against the decision.
The 35-day notice period starts on receipt of the letter, which also provides details of how to appeal against the decision.
But the move has triggered an angry backlash from some customers who told the BBC they received a letter informing them of the withdrawal, despite having an excellent credit history.
But the move has triggered an angry backlash from some customers who told the BBC they received a letter informing them of the withdrawal, despite having an excellent credit history.
Whilst it is lovely to spend, it is the paying back that is always the difficulty Angela Knight British Bankers Association
Whilst it is lovely to spend, it is the paying back that is always the difficulty Angela Knight British Bankers Association
Gillian Cox, of Farnham, Surrey, said she was "absolutely furious" to learn her credit card had been cancelled in what she described as an "unbelievable arbitrary action".
Gillian Cox, of Farnham, Surrey, said she was "absolutely furious" to learn her credit card had been cancelled in what she described as an "unbelievable arbitrary action".
Mrs Cox said she and her husband are "retired, no mortgage, no debts" and "always paid the balance off in full each month".
Mrs Cox said she and her husband are "retired, no mortgage, no debts" and "always paid the balance off in full each month".
She added that she had contacted credit reference agency Experian who said she was marked as having an excellent credit rating, "thus totally negating Egg's claim that this measure is about credit risk".
She added that she had contacted credit reference agency Experian who said she was marked as having an excellent credit rating, "thus totally negating Egg's claim that this measure is about credit risk".
'Stop spending'
'Stop spending'
A spokesman for Egg said: "We are sorry some customers are upset after receiving notification we are ending their credit card arrangement, but they are people we do not feel it is appropriate to lend any money to."
A spokesman for Egg said: "We are sorry some customers are upset after receiving notification we are ending their credit card arrangement, but they are people we do not feel it is appropriate to lend any money to."
He added: "The decision was taken after an extensive one-off review of our credit card book following acquisition by Citigroup."
He added: "The decision was taken after an extensive one-off review of our credit card book following acquisition by Citigroup."
"We can certainly understand the concerns, but even if people are up-to-date with repayments, they are people we decided we no longer wish to lend money to regardless of their status."
"We can certainly understand the concerns, but even if people are up-to-date with repayments, they are people we decided we no longer wish to lend money to regardless of their status."
This will not have a detrimental effect, it may even have a positive effect Peter Brooker Experian public affairs director
This will not have a detrimental effect, it may even have a positive effect Peter Brooker Experian public affairs director
Angela Knight, chief executive of the British Bankers Association, said that Egg's action was "a sensible way of looking after a business".
Angela Knight, chief executive of the British Bankers Association, said that Egg's action was "a sensible way of looking after a business".
"Whilst it is lovely to spend, it is the paying back that is always the difficulty. It might seem a bit hard to say to people 'You do need to stop spending' but it does actually make real sense so to do."
"Whilst it is lovely to spend, it is the paying back that is always the difficulty. It might seem a bit hard to say to people 'You do need to stop spending' but it does actually make real sense so to do."
Peter Brooker, public affairs director of credit reference agency Experian, said the move would not have a negative impact on the credit rating of those affected and could even improve it.
Peter Brooker, public affairs director of credit reference agency Experian, said the move would not have a negative impact on the credit rating of those affected and could even improve it.
Tightening market'
Tightening market'
"Credit reports only have balances showing as outstanding or settled and a date. So when Egg updates its portfolio with us, it would just say those accounts have been settled," he advised.
"Credit reports only have balances showing as outstanding or settled and a date. So when Egg updates its portfolio with us, it would just say those accounts have been settled," he advised.
"That will not have a detrimental effect, it may even have a positive effect, but that depends on the scoring mechanisms used by lenders and the other balances the individual has.
"That will not have a detrimental effect, it may even have a positive effect, but that depends on the scoring mechanisms used by lenders and the other balances the individual has.
"Some lenders might feel that someone with five credit cards is a risk but someone with four is a better bet and the fact that one card has been settled could be a positive sign. To other lenders it may make no difference."
"Some lenders might feel that someone with five credit cards is a risk but someone with four is a better bet and the fact that one card has been settled could be a positive sign. To other lenders it may make no difference."
Egg's decision could be a signal of the tightening credit market, with consumers facing more difficulty in repaying debts and reducing spending.
Egg's decision could be a signal of the tightening credit market, with consumers facing more difficulty in repaying debts and reducing spending.
Are you one of the Egg customers that has received this letter? What's your reaction to this story? Send us your comments by filling out the form below.
Are you one of the Egg customers that has received this letter? What's your reaction to this story? Send us your comments by filling out the form below.
I'm an egg customer also and after reading this report thought that I would be one of the ones affected. We regularly max out our egg card through balance transfers. "Risky customer" you may think, but not so it seems. I have yet to receive a letter so this seems to bear out what everyone is saying about maximising profitsDave, London UK
I received my letter yesterday despite being a customer for over 5 years, having a loan and multiple savings accounts with Egg, making substantial regular payments against a moderate C/C debt equating to less than 2 weeks salary. I called Egg and was informed that this was as a result of decisions made following the Citigroup takeover.When I asked if this was a decision made based on profitability I got the reply "........That's not the way they put it to us, but if you want to read that into it.........."Simon, Luton
If you pay your balance of in full every month you have no need of a credit card. You cost the bank money in administration. Why should they do something that doesn't make them money? It makes perfect business sense.Damien, United Kingdom
I received one of these Egg cancellation letters yesterday. The strange thing is that less than two weeks ago Egg had agreed to double my credit limit. Am I a bad credit risk? They obviously didn't think so two weeks ago!Kenny, Reading, UK
Like all the previous comments we have had our card for 8 years, have never missed a payment and only owe £600.We have very little other debt so to label us as risky is totally outrageous!! Our credit record is also excellent. They are ditching us for quite the opposite reason to the one they have stated. We are too good with our repayments to make them any money!!Jayne, Bristol
I too received a letter from egg. I was very surprised as I paid the full balance in October and have not used the card since, so i would hardly consider myself a high risk customer just a low profit one from eggs point of view. I agree with the above comments. This is not the way to treat loyal customersChristina Vorley, Grimsby, UK
Credit is a privilege not a right and, even though Egg should be honest as to why they are withdrawing cards, it is their right to do so. Of course they are in business to make money and, although they still do even if you pay off your card in full each month (because they only pay the retailer a percentage of the transaction value) low usage cards can cost more in administration than they make. If you are a low user, get a card from your bank who make money from you in other ways. Even if the rate is not quite as a good, a a low user/full-re-payer do you care ?Chris Harper, London, UK
I'm an Egg customer also and after reading this report thought that I would be one of the ones affected. We regularly max out our egg card through balance transfers. "Risky customer" you may think, but not so it seems. I have yet to receive a letter so this seems to bear out what everyone is saying about maximising profitsDave, London UK
I too have just received one of these letters. I have had an Egg card for almost 8 years and have never missed a payment (like others here I usually pay off the balance if I have one) and have never gone over my limit and my credit rating is excellent. It seems to me that Egg are picking on those who are in control of their finances and therefore not paying them lots of interest. If they deem fit to remove my Egg card, I shall be removing my Egg Savings (which has a far larger balance than my Egg card!). I think this is disgraceful behaviour on their part.Mary, Edinburgh
I too have just received one of these letters. I have had an Egg card for almost 8 years and have never missed a payment (like others here I usually pay off the balance if I have one) and have never gone over my limit and my credit rating is excellent. It seems to me that Egg are picking on those who are in control of their finances and therefore not paying them lots of interest. If they deem fit to remove my Egg card, I shall be removing my Egg Savings (which has a far larger balance than my Egg card!). I think this is disgraceful behaviour on their part.Mary, Edinburgh
Egg MAY be cancelling high-risk customers, but they are also apparently ditching those, like me, who pay no interest because we are GOOD creditors! Its disgusting that they are making out its just the bad ones who are being dropped. Fair enough if that's what they want to do, but don't send a really upsetting letter that makes it sound like we have a bad credit history all of a sudden. Good riddance to them, I say, if that's how they treat people.Trevor Smith, Nottingham
Egg may be cancelling high-risk customers, but they are also apparently ditching those, like me, who pay no interest because we are good creditors! Its disgusting that they are making out its just the bad ones who are being dropped. Fair enough if that's what they want to do, but don't send a really upsetting letter that makes it sound like we have a bad credit history all of a sudden. Good riddance to them, I say, if that's how they treat people.Trevor Smith, Nottingham
I too had the "Your Egg Card has been cancelled" letter....very rude to put that before the Dear Sir or Madam! I too checked my credit rating as I was alarmed with the High Risk label I was being given....NO problem, excellent credit rating! I agree with other comments, it seems I was not making them enough money as I paid my balance off. There was also no way of appealing. I asked when I rang and was given a very curt "No". Jane, London
I too had the "Your Egg Card has been cancelled" letter....very rude to put that before the Dear Sir or Madam! I too checked my credit rating as I was alarmed with the High Risk label I was being given....No problem, excellent credit rating! I agree with other comments, it seems I was not making them enough money as I paid my balance off. There was also no way of appealing. I asked when I rang and was given a very curt "No". Jane, London
I received the letter yesterday. What angered me most was the suggestion that the decision may have been the result of some detrimental entry to my credit report, causing me to fear that I may have been the victim of identity theft. This put me to the needless expense of obtaining a copy of my credit report, which of course is fine. The letter from Egg consisted of a tissue of lies which were merely a smoke-screen for the real reason behind the decision which I suspect is that I don't use the card enough. Why couldn't they just be honest and say that - but then I suppose the two words "honest" and "banking" don't sit well together these days do they!Chris O'Shea, Woking, Surrey
I received the letter yesterday. What angered me most was the suggestion that the decision may have been the result of some detrimental entry to my credit report, causing me to fear that I may have been the victim of identity theft. This put me to the needless expense of obtaining a copy of my credit report, which of course is fine. The letter from Egg consisted of a tissue of lies which were merely a smoke-screen for the real reason behind the decision which I suspect is that I don't use the card enough. Why couldn't they just be honest and say that - but then I suppose the two words "honest" and "banking" don't sit well together these days do they!Chris O'Shea, Woking, Surrey
I received this letter yesterday, I'm not sure why. I've been an Egg card holder for five years. I've always met the repayments and a year ago I paid off my whole £2000 balance in one go and have not used the card since. Perhaps Egg is equating 'high risk' with unprofitable?Chris, London
I received this letter yesterday, I'm not sure why. I've been an Egg card holder for five years. I've always met the repayments and a year ago I paid off my whole £2000 balance in one go and have not used the card since. Perhaps Egg is equating 'high risk' with unprofitable?Chris, London
After receiving my letter yesterday, I checked my credit rating. It's one of the highest possible. I told egg and they agreed that I was a "perfect customer" but they will not reverse their decision. There is no information on how to appeal in their letter.Kirsty, London
After receiving my letter yesterday, I checked my credit rating. It's one of the highest possible. I told egg and they agreed that I was a "perfect customer" but they will not reverse their decision. There is no information on how to appeal in their letter.Kirsty, London
I was notified yesterday that my account is to be closed. For Egg to say I'm a risky customer is a joke. I have a mortgage and a loan which I have never missed any payments on. The reason they have cancelled my account is that I pay the balance off each month. That's what they don't like. Luckily I already have other credit cards just waiting to be used so it hasn't impacted on me. It's just left me annoyed that they treat a loyal credit worthy customer of 5 years like this.Mark, Sheffield
I was notified yesterday that my account is to be closed. For Egg to say I'm a risky customer is a joke. I have a mortgage and a loan which I have never missed any payments on. The reason they have cancelled my account is that I pay the balance off each month. That's what they don't like. Luckily I already have other credit cards just waiting to be used so it hasn't impacted on me. It's just left me annoyed that they treat a loyal credit worthy customer of 5 years like this.Mark, Sheffield
I had a letter from Egg yesterday about this. My Credit Record is excellent and I actually took out an egg loan 3 months ago!.
I had a letter from Egg yesterday about this. My Credit Record is excellent and I actually took out an egg loan 3 months ago!. My Egg credit card has not been used for over 6 months and had £0 owing. Some customers are being ditched because in my view they are not making Egg any money.Dave Ware, Herts
My Egg Credit card has not been used for over 6 months and had £0 owing. Some customers are being ditched because in my view they are not making Egg any money.Dave Ware, Herts
A fantastic move by Egg. If (as we're led to believe) in the coming years people will struggle to make repayments on money they have borrowed then this is a brilliant corporate socially responsible move by Egg... At least on the face of it....and if they weed out a few non-profitable customers too then fair play.George, Stourbridge
As one of those affected by egg's decision. I would vehemently deny that I am a 'risky' costumer. I am homeowner who has never missed a payment on his debt. I can only guess that because my debt with Egg is low (under £700) that they deem my account as unprofitable.
As one of those affected by egg's decision. I would vehemently deny that I am a 'risky' costumer. I am homeowner who has never missed a payment on his debt. I can only guess that because my debt with Egg is low (under £700) that they deem my account as unprofitable. For Egg to withdraw my account in this manner is an insult and to label me a 'Risky' customer in the media is a further affront.Jonathan, Bristol, uk
For Egg to withdraw my account in this manner is an insult and to label me a 'Risky' customer in the media is a further affront.Jonathan, Bristol, uk
