Egg Policy Change ?

BritBrat

Originally Posted by Halloway
Come the revolution, she'll definitely be one of the first against the wall...

But will she have EGG all over her face :rotfl:

Looks that way to me, I don't expect it will be her best Monday next week.

Clariman

Psiloman wrote: »

In many ways Eggs decision makes excellent business sense. Review customer base and ditch those customers who are a high risk and those customers from whom they make no profit and concentrate on customers from whom they can maximise returns. Its just that they have completely mis-handles the whole change management process by not being open and honest about what they were doing. But could we have expected any more from Citi Bank...probably not

Citibank/Egg have a total right to decide who they wish to lend to and they clearly want to have profitable customers. What is wrong about this is that they appear to have tried to disguise their actions by inaccurately stating that it is due to their customers' deteriorating credit profiles. Receiving a letter saying that your credit card is being withdrawn is unpleasant enough without Egg slapping you in the face by implying it is your fault!

Clariman

Psiloman

Clariman: that's exactly what my previous post says - I do not disagree with you especially as one who has been slapped in the face

looby-loo_2

If I had savings with them I'd be moving my money ASAP

heppy23

I think this is a PR disaster for egg and they have upset a lot of people.
BUT I think what they have done is a sign of more to come from other card providers.

They all have to get money from somewhere to lend to us. The amount of money around for them to lend to us is shrinking thanks to this credit crunch mularkey.

Credit card companies are dependant on some of their customers taking forever to pay their debts off to generate money for them in the way of interest.

If everyone only stoozed on a companies cards or only paid of their whole balance each month the company would struggle to make any money.

I'm not saying I agree with what they done (especially not the way they have done it) but I can see WHY they have done it.

Psiloman

International coverage here:

http://www.iht.com/articles/ap/2008/02/02/europe/EU-FIN-COM-Britain-Egg.php

Clariman

Psiloman wrote: »

Clariman: that's exactly what my previous post says - I do not disagree with you especially as one who has been slapped in the face

Indeed I was just amplifying what you said.

Clariman

dag_2

Maybe it's a computer error, or maybe Egg really do think the people they've axed have either been bad payers in the past, or are likely to become bad payers in the future. Or maybe they think the people are too unprofitable, and that the account doesn't justify the other costs, or other risks, such as being a victim of identity theft. Maybe Egg are just simply plain lying.

Whatever the truth is, one thing strikes me as odd about all this.

To put it in perspective, let's remember that credit card companies do have the right to freeze people's accounts at any time. They can and do use from time to time, not just because they think people might be bad payers, but also to prevent fraud by third parties, who may or may not be associated with retailers that you have used your card with.

However, they don't have the right to insist that you make payments on your account any earlier than you would have otherwise done if the card had stayed active. This is one way in which a credit card debt is very different to an overdraft. In other words, you still have the right to pay off in full, or to make only the minimum payment, or to pay any amount in between in any month, and you continue to have the right to pay no more than the minimum payment each and every month until the balance is finally cleared.

By contrast, the repayment of an overdraft can be demanded in full at any time.

However, when credit card companies do exercise their right to freeze people's accounts, they don't usually give people any notice that they're going to do it. Since it's usually done to try to prevent fraud or bad debt, it's very unusual to give notice. That's because giving notice means the fraudster has more chance of doing a runner with the money. The whole point of freezing the account is to prevent that happening.

So I think it's very unusual that Egg have given notice this time.

The line about their customers being "too risky" is clearly a load of codswallop. After all, now that you know Egg plans to freeze your card in the future, what's to stop you maxing it out and leaving the country permanently before that happens? If Egg thought the risk on your account was that bad, they would have frozen your card immediately, without giving you any notice. The fact that they haven't done this is a sign that your own credit-riskiness is not the only factor in Egg's decision.

Ironically, the fact that they've decided it's safe to give you notice is a sign that they think your credit risk is actually better than they're letting on. Choosing to give you notice of your card withdrawal before actually doing it could have been a good PR opportunity. It could have been opportunity for them to show that they're being fair and straight with you. It's just a shame that it's backfired so spectacularly! :rotfl:

Of course, none of this means that Egg won't freeze your card immediately, before the notice period is up, if they do come to think that your card is at risk of fraud within the next 35 days.

Just a thought.

Halloway

netlang wrote: »

But will she have EGG all over her face :rotfl:

I was thinking more along the lines of her own eviscerated entrails but I'm easy on the subject.

(If I've gone too far then sorry, it sometimes happens.)

Jaymz

heppy23 wrote: »

I think this is a PR disaster for egg and they have upset a lot of people.
BUT I think what they have done is a sign of more to come from other card providers.

They all have to get money from somewhere to lend to us. The amount of money around for them to lend to us is shrinking thanks to this credit crunch mularkey.

Credit card companies are dependant on some of their customers taking forever to pay their debts off to generate money for them in the way of interest.

If everyone only stoozed on a companies cards or only paid of their whole balance each month the company would struggle to make any money.

I'm not saying I agree with what they done (especially not the way they have done it) but I can see WHY they have done it.

Completely agree with what your saying. What would be great is if other credit card companies follow suit but handle the whole thing a lot better than Egg and also not penalise those who don't use their cards (like what has happened in this thread).