Egg Credit Card Company To Apologise
Earlier this month credit card company Egg cancelled the accounts of 161,000 of its cardholders under the pretext that they were a 'poor credit risk'.
Customers, many of whom repeatedly paid off their credit cards in full and on time each month, were sent a letter giving details of when and why their account would be terminated. They were furious that they had been labelled poor risk when in fact they held impeccable credit records.
Former consumer affairs minister, labour MP Nigel Griffiths, will be meeting with the chief executive of Egg, Ian Keer, to discuss further actions. It would seem that credit card company Egg, owned by Citibank will be forced to apologise.
In a statement Griffiths said, "Egg has got a lot of explaining to do."
Egg boss Keer will be accused of dumping customers who paid their bills in full simply because they were not profitable.
"If you want to get rid of customers who are not bad credit risks but who you just don't make money out of, then you should make a charge for your card," he said.
"One letter I received was from someone in the City who said last year he made £1m, he has £100,000 worth of shares in Citibank group that owns Egg, and he's absolutely outraged that he should be told he is any sort of credit risk."
Egg has denied accusations that it has acted deviously and claims that it did not cancel the accounts of customers it saw as unprofitable but rather as high risk.
Nevertheless the Office of Fair Trading (OFT) has been asked to investigate a series of complaints made against the credit card company. The OFT issues consumer credit card licences to all credit card companies and needs to be sure fair trade is being conducted, especially since Egg is still advertising for new customers.
Mr Griffiths added, "Egg's job now is to prove they have an honest intention in this. They made a mistake and we need both an apology and compensation for wasted credit agency checks."
Published on February 27, 2008
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