Egg Policy Change ?

steveo67

Hi Obe,

So you joined MSE sometime in the last 48 hours to essentially defend Eggs recent actions - like a couple of others. Much as I admire passion on that level I can't help but think you work for Egg. Is there anything you can say to make me think otherwise?

Booby's_Place

Hi all. I have a bit of a problem with all of this.

Sites like this one were set up to get "revenge" on the banks. So people start shouting about illegal charges etc. and the banks start to lose a revenue stream. To be fair Egg has never really made any money, so is it really a surprise that they are one of the first banks to start dealing with unprofitable accounts?

Others will follow, and I can't blame them - business is business and should make a profit. Egg can't do that at the moment, so closing accounts which cost money seems like a logical place to start. Anyone atually pay for current account banking? Not yet I would guess, some may pay a fee for extras, but not the account.

The thing is, if you start taking away revenue from one area, the banks will try to recover it elsewhere. I suspect the days of free banking are nearing an end. Can't charge a large fee to those who go over limit or bounce a payment? Ok, we'll charge everybody for everything. Personally I would rather those who are at fault to pay more - maybe because I try to manage my money properly!

I can understand people being upset, particularly about the style of the communications, but I still think it makes good business sense.

I don't think any kind of investigation will show anything, like someone else said if it's in the terms and conditions, and they give notice, they can demand payment in full. They are being quite decent by actually not demanding full payment, but just closing the facilities, and not allowing further spending.

The expression, mountain out of a molehill seems to apply.

steveo67

Obe_one wrote: »

Yes...I don't work for Egg.

Thanks Obe,

However, after reviewing your posting history I consider you to be have a higher risk profile than I consider to be acceptable. I will henceforth disregard your posts.

dcf

Just logged into Egg. I have a few accounts with them. Both my credit cards have a status of "Error"! The savings accounts are OK, though.

Booby's_Place

On the plus side, my Egg Card balance has disappeared off of their website at the moment - does that mean I don't have to pay?? :-)

SoozyJ22

There's no sign on my Egg (visa) CC on the web site any more ... "You have no Egg accounts to display at this time". I got the message about maintenance when I logged in, but that seemed to imply that there were just a few functions that would be unavailable, and others would still be possible.

I'm fully expecting to get a letter since I have a 14k limit and have only spent about a tenner with them since I opened the account in September (which was then paid of by a full balance DD). What I don't understand is that if they think the risk/reward ratio is wrong then why not just lower the limit rather than cancel the card. I don't think I've ever had a balance of more than £1,500 on a card so they could quite happily reduce my limit by 12k and I'd not mind at all.

Clariman

Status of Egg card withdrawal poll as at 9am Sunday morning.

Of those who have had their card withdrawn

• 44% pay off their card in full each month
• 23% only make minimum payments
• 11% acknowledge having some credit issues
• 23% make more than minimum payments

So the majority of people having their cards closed are ones that are non profitable to them.

However, of those who have not had their card withdrawn

• 62% pay off their cards in full each month
• 12% only make minimum payments
• 6% acknowledge having some credit issues
• 19% make more than minimum payments

Looking it another - perhaps more revealing - way,

• 38% who pay off in full each month have had their card withdrawn
• 63% who only make minimum payments have had card withdrawn
• 58% of those who acknowledge credit issues have had card withdrawn
• 50% who pay more than minimum have had card withdrawn

So what conclusions can we draw from all of that? I would draw the following conclusions:

• The more you pay off your card each month, the more likely you are to retain your card
• If you only make minimum payments or have a credit issue, you are more likely to lose your card
• Given the spread of people who are losing their cards it would suggest that "risk" is indeed a part of it but so is "profitability" a large part of it
• Overall more non-profitable customers are being shed than riskier ones

The poll seems to be identifying some correlations but it does not necessarily identify cause and effect. For example it would be interesting to strip out stoozers from the list of people who make minimum payments only, because stoozers tend to have tip top credit profiles despite making minimum payments and it could be some other aspect of the min payments profiles that causes non-stoozers to have cards withdrawn.

A picture is emerging.

Clariman

The_Chicken

Clariman, your poll didn't really apply to me.

I didn't always pay it off in full on the occasions I did have a balance, however I would do the majority of the time, and have never missed any payments in close to eight years.

However, like quite a few here it seems, I'm one with no outstanding balance at all for quite a while, therefore no payments to make.

Probably classed as a 'dormant' account?

Clariman

The_Chicken wrote: »

Clariman, your poll didn't really apply to me.

I didn't always pay it off in full on the occasions I did have a balance, however I would do the majority of the time, and have never missed any payments in close to eight years.

However, like quite a few here it seems, I'm one with no outstanding balance at all for quite a while, therefore no payments to make.

Probably classed as a 'dormant' account?

Good point. I tried to cram as much into the poll as I could to try to get some metrics behind all the anecdotal evidence that it was not just high risk customers. However, it isn't possible to get all nuances catered for in such a single poll. I suspect that if we divided up the group who responded by saying "paid off in full each month" we might find that the ones who had dormant accounts were ones that were closed. A fair proportion of those who selected "other" in the poll may come into that category.

Still, I think it clearly shows that non-profitable and higher risk customers were included in the clearout. It also suggests that more unprofitable customers have been kicked out than higher risk ones, but that you have a greater chance of losing your card if you are higher risk.

Clariman

The_Chicken

I do wonder though if a "Have no outstanding balance for x months or more" might be a good option to add? Maybe 6 or 12 months? Just a thought.

It is interesting, and I wonder if it will cause a bit of panic (again) and certainly bad PR if and when the media start spinning about on it!