Egg Policy Change ?

burbs_2

Obe_one wrote: »

My post wasn't intended to be patronising, just honest. All I keep hearing is "I pay my balance off in full each month, have never missed a payment", "Perhaps it is because they aren't making any money out of me"

The fact is as I said, if the account is being terminated then it will be a credit risk related issue.

The Northern Rock situation arose from them borrowing money from other banks in order to lend money out as a mortgage, the two situations are in no way similar.

You have to love all these conspiracy theories though!

Why would people come on an anon forum and lie about their missed payments etc.... its hardly like you will know its John Smith from number 14 is it.

Plus there are a few people saying the same things about Egg at the moment.

Psiloman

ado...if Citi bank says your a risk then your a risk...after all they have such a great track record on risk management & analysis

chicken_legz

At the end of the day everyone is a risk, everyone could lose their job or have a life change.

All I can think is that its the right decision as you can see those that have had their accounts terminated are making the most fuss. If mine was I wouldnt be bothered, just mean I use the debit card more. People are too used to getting credit, it doesnt matter if you are a homeowner etc you could still be a risk.

A homeowner with a secured loan is more of a risk than someone with just an Egg card!

hitman

Just finished reading most of the (current) 18 pages of this thread. I received the letter regarding closure of my Egg Visa Account too and was spooked enough by the "credit risk" statement to check my credit rating with Experian. It came back good.

I have always paid off my credit card balances in full and sometimes paid early.

I have been with Egg from near the beginning and I do all my day to day spending on my Egg Visa as it was just convenient. Guess I will have use another credit card.

Like many others here, I'm not bothered about using the Egg Visa card, but it is the way that Egg have portrayed me and my credit rating and how it made me feel, I really thought my credit rating had perhaps suffered from regularly taking advantage of 0% credit card offers.

I've usually had a decent amount of savings with Egg (couple of months salary), but will be shifting this on Monday. As far as I'm concerned, Egg have offended me with the wording of their letter so I'm voting with my feet.

Psiloman

chicken_legz....you miss the point. Yes we are all a risk. But Egg/Citi Banks definition is at odds with everyone elses. But if they say the sky is green then the sky is green - right?

I don't need there credit BUT I don't need them saying in the media that I am a risky customer when it is only their definition that makes me one. Lies, damn lies and EGG!

chicken_legz

Its not lies it responsible lending, credit has been too easy and I think it should be harder to get.

Notice on the roads how many people drive audis and BMWs yet struggle with the payments.

I tell you there is nothing more stressful than being in finn diffs. Its a piece of plastic, in the old days everyone paid with money not cards! Egg tried in France and failed, the reason why was that they dont use cards so much, something we need to adapt to.

You need to realise that the media is a 'spin' machine.

ado

Psiloman wrote: »

chicken_legz....you miss the point. Yes we are all a risk. But Egg/Citi Banks definition is at odds with everyone elses. But if they say the sky is green then the sky is green - right?

I don't need there credit BUT I don't need them saying in the media that I am a risky customer when it is only their definition that makes me one. Lies, damn lies and EGG!

Spot on.

I felt offended by their allegation and was worried in case I had been the victim of ID fraud. This could have been avoided by the use of some tact rather than the insinuation that all 161,000 terminated accounts were high risk users.

Psiloman

Check out this coverage!!:

http://www.guardian.co.uk/money/2008/feb/03/creditcards.citigroup

Look at all the MP support for investigation!!

"Senior MPs are demanding an Office of Fair Trading investigation into greedy banks after Egg's decision to ban 160,000 customers from using their credit cards dramatically backfired."

CannyJock

Quote from the BBC news site:

"The move follows a "one-off" review after Egg was bought by US-based Citigroup for £575m last year. "

Presumably people can close their cards and then reapply in a few months to get a new card with a 0% balance transfer offer, and do a stooze at Egg's expense

oldtup

I think that EGG have set up a risk/reward query on all their accounts.

I.e. What is the total risk (credit limit) on this account and how much money do we make out of it. Therefore when they see an account with, say, £10,000 limit and looking at the last years profit they see nil then the alarm bells ring.

I guess they have a figure to tell them the average chance of someone in your position becoiming a bad debt. Say it's 0.1% per year, this means that it costs them £10 per year to cover their position. If they are making £100 per year then that's ok, but if they are making £5 a year then it doesn't stack up - to an actuary. Of course this doesn't factor in other things such as other accounts that people may have and accounts that their family and friends may have etc etc.

I just wonder how many really influential people will have been caught by this. 600 odd MP's, probably a few. Bankers have credit cards, how many of those have been terminated.

The big mistake they made was doing it all at once. Most of us don't like airing our credit histories in public but when we see the same story being told again and again then it gives us the confidence to speak out.

If you still feel angry in the morning then email your MP (a google search should find their website) I've worked with an MP's office and I can tell you that a small handful of messages on the same subject WILL have an effect - especially if they are really different people who haven't co-ordinated letters etc - so no standard letters or anything like that, just make your own points. You would be surprised at how easy it is to get a bandwaggon rolling.

Finally, why do I feel so angry about this? I guess it's because it makes me realise just how vulnerable we all are to some computer deciding to turn our credit off. If I put all my accounts into the same basket then I would be in credit except for my mortgage - which is covered about 5 times by my house - so I don't actually need credit. But when you are an upstanding member of the community who manages their finances in a responsible way and your friendly bank turns out to be owned by an American Bank in trouble then..........!

So it IS worth making a fuss about. Ultimately the banks do depend upon us and the Northern Rock issue has made them feel vulnerable as well. We need to give them the message that we expect our banks to be honest and to take a different approach. My Bank (Barclays) is honest with me when they charge me a fee for an overdraft facility - whether it's used or not. They tell me that they need to cover the cost of providing credit facilities and give me the choice as to whether I accept this or not.

EGG could have asked me accept a reduction in my limit to reflect actual useage of the card. They could also have imposed a small yearly charge, which may well have led to me closing the card myself.

Hey Ho, so now I'll log on and transfer enough money to my account in order to close it. Goodnight everyone.