OFT may investigate Egg credit decision after customer uproar
The UK Office of Fair Trading says it has received a complaint over online bank Egg’s decision to cancel more than 160,000 credit card agreements.
The OFT added that it was considering whether to investigate the complaint which was made by Nigel Griffiths, the Labour MP and former consumer affairs minister.
Egg, which is owned by the US bank Citigroup, caused uproar among customers in January when it announced 161,000 credit cards would be withdrawn from those considered a high credit risk. Some customers claimed that their cards were being cancelled as they regularly paid their balances off, and could not be charged profitable interest rates.
Egg claims the cancellations came after a risk review conducted after the company was purchased Citigroup from UK-based Prudential in May 2007. The withdrawal of the cards could lead to a rise in arrears and non-payments among customers angered by the move, according to rating agency Fitch. It added that Egg cardholders might decide to repay other credit card debts first, rather than pay off debts on a card they could no longer use.