Car Insurers Debate Over Future Profits

UK car insurers have been running an unprofitable business for 14 years. Independent market analysts, Datamonitor, say 2009 looks to be a profitable year despite the doubts

March 13, 2008

Budget Report Expectations

Chancellor Darling's Budget Report is expected to raise taxes on alcohol, fuel emissions, flights and many other issues concerning the economy. Tax burdens expected to increase on poorer families

March 12, 2008

Card Fraud Rises Again

Card fraud has increased over past year. Whilst chip and PIN technology has been successful in the UK, criminal activity overseas has increased 77 per cent

March 12, 2008

Tax Cuts Needed To Restore Confidence

Appeals for corporate tax cuts are submitted to the Treasury as it prepares its Budget report this Wednesday. Business and banking sectors are worried about the direction of the UK economy

March 10, 2008

First Time Buyers Take Hit From Stamp Duty

Stamp duty tax has not kept up with the rate of increase in house price inflation over the past decade. Yet another hurdle first-time buyers must leap over to get on the property ladder

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Read all Finance News

Egg To Go Ahead With Card Cancellations

Following a meeting with Labour MP Nigel Griffiths, former consumer affairs minister, the credit card company Egg has said it will not be changing its card cancellation policy.

After being taken over by Citibank last year Egg reviewed the accounts of over 2.3 million credit cards and found some 161,000 customers to be of 'poor credit risk'.

Despite causing much uproar amongst those customers singled to have their credit cards cancelled, Egg refuses to back down in its decision.

A spokesman for the company said:

"The review was based upon a large number of variables and studied the level of risk inherent in groups of customers, rather than every individual."

He added, "while some customers in that group may be up to date with their payments and have a good record with credit reference agencies, the probability of them becoming a higher-risk customer in the future is higher than we wish to accept."

Egg explained that it had looked at the changing ways in which customers were using their credit cards in order to determine whether or not they might be high risk. Those customers applying for more cards or altering the way they were spending on existing cards were classified as potentially high risk. Although many of the customer cases examined showed no signs of default, Egg said they did however, show signs of heading in that direction.

The bank denied all accusations that it was cancelling the accounts of those who paid off their borrowings in full each month simply because they were unprofitable. In their defence, Egg claimed every customer was profitable as fees were charged for every transaction made.

Griffiths went on to say:

"I expressed my strong concerns about the letters sent to customers, particularly since I felt that more information could have been provided. I have received an assurance that Egg will ensure that the credit record of these card-holders will not be affected, as long as they keep up their agreed repayments."

Griffiths has already put forward a complaint to the Office of Fair Trading (OFT) regarding Egg's credit card cancellations. A decision has yet to be made by the regulator as to whether or not it will investigate the matter further.

The credit card company has said however, that it will consider any complaints from customers who feel the decision to terminate their accounts was unfair.

Published on February 28, 2008

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