OFT mulls Egg probe
Insert oeuful egg pun here...
The Office of Fair Trading is considering investigating online bank Egg over allegations that it is ditching credit card customers who pay off their bills every month and so avoid paying penalty charges.
Egg denies the claim saying that the 161,000 people told their cards were being withdrawn were considered a credit risk. The card holders targeted make up seven per cent of Egg's total credit card customer base.
A spokesman for the OFT confirmed they had received a complaint but said it was too early to say if a full investigation was likely. The spokesman said: "The FSA passed on a complaint they received from MP Nigel Griffiths. We are considering the complaint to decide whether or not to investigate it further."
In a statement last week Egg insisted that the decision to withdraw cards was motivated by risk assessment and not profit.
Egg said: "In this one-off review we assessed that the credit profiles of these customers had deteriorated from the time they joined Egg until the time Citi acquired Egg in May 2007 and that they presented a higher than acceptable credit risk to the bank."
Many customers have complained about the decision and claim there is nothing wrong with their credit records. Some are even calling for legal action against Egg, describing its statements regarding the withdrawal of cards as tantamount to libel. ®