Egg Policy Change ?

Obe_one_2

Counter55 wrote: »

Well your earlier posts seem to have gone off the board - some are quoted in posts 343 and 344 - before your first post currently existing.


Quote:
Originally Posted by vikingaero
Oh how I'm going to enjoy making a FOS complaint on her behalf.:T

Obe_one:
If I were you I wouldn't waste my time. The FONZ will reject your complaint in favour of Egg...it states in the terms and conditions, signed for at the beginning of the agreement, that they may cancel your account at any time without reason provided they give you 30 days notice.

If I get a letter my complaint wouldn't be that Egg didn't have the right to give notice to close the account without reason, it would be that Egg gave a reason to the press and that reason was damaging and false.

Interesting to see the way the story is being reported -
http://www.theretailbulletin.com/news/debt_laden_customers_banned_from_using_their_egg_credit_card_02-02-08/
and
http://www.customerthink.com/blog/internet_bank_egg_fires_161_000_customers

Early reports on this with the BBC seemed to explain exactly what it said in the letter someone posted earlier.

The key I suspect will be the wording of the letter in that the affected accounts are those deemed to be a credit 'risk'.

As I said in an earlier post, there are a number of factors on an individuals credit file that may lead to this decision.

It is not necessarily purely down to poor credit or poor history with Egg.

It seems to me as though all the more recent press reports follow messages from Egg customers saying they pay their balances in full etc...so therefore must be unprofitable. The journalists writing these stories are lazy, they aren't reporting on fact, they are reporting on opinion and conspiracy theories.

The media does a very effective job of feeding the flames, you have obviously fallen for it.

Obe_one_2

Bismarck wrote: »

obe-one & jonnyb.

thanks very much. You probably don't realise how important this has been for me...sometimes it's the small things...

the Egg thing has made people huff and puff and I have been a bit jealous I suppose that they can stooze away with spare cash that I've not got. The Egg decision was perfectly sensible, just badly handled.

Your insights into the other side of the desk have been really appreciated. thanks

Not a problem Bismarck - glad we could help someone at least!
:T

chicken_legz

Going to the FSA will not help, T&C's say you can have the account closed so nothing you can do about it.

Media = Spin, go figure..............

Paul_Herring

jonnyb wrote: »

I think that those customers complaining, who [...] pay the entire balance in full every month, should stop complaining. Egg's actions have not caused them any hardship; at most they will lose the tiny amount of credit interest they would have earned on the cash that would be used to pay the balance in full.

The general gist of what I've seen is that the complaints are mainly about Egg accusing them of being an increased credit risk, when they aren't.

I'll be complaining of this if I get a letter this week implying the same.

jonnyb

If someone has a card, with a zero balance, and a significant limit, that they have not used for months, then the lender might well consider them an increased credit risk.

Someone who starts to struggle might start to use that limit, and subsequently generate a bad debt.

Obviously the above scenario does not apply to those who use their card regularly but pay off in full each month.

I don't know enough about Basel 2 legislation, but it has something to do with lenders having enough reserves to pay their outstanding commitments.

The text below is taken from Wikipedia :

In practice, Basel II attempts to accomplish this by setting up rigorous risk and capital management requirements designed to ensure that a bank holds capital reserves appropriate to the risk the bank exposes itself to through its lending and investment practices. Generally speaking, these rules mean that the greater risk to which the bank is exposed, the greater the amount of capital the bank needs to hold to safeguard its solvency and overall economic stability.

If it covers credit cards as part of their risk, then by reducing potential risk to unused credit limits, they reduce the amount of capital they need, which in the current economic climate will probably help them substantially.

help-really-needed

Myself and hubby got the same letter from Egg Visa on Saturday. Neither card has any balance. We both use the cards monthly for fuel then pay the balance off each month.

As has been said before, we are not credit risks. we have a 54k mortgage with a 40k (more with bonus and overtime) joint income. we only use the cards as a simple way too keep our fuel spending seperate from other household expenses.

I just personally find it inconvenient to apply for another card, and i also find it offensive to be deemed a 'risky customer' by the press.

I guess i'll be searching for a great CC deal tomorrow.

Paul_Herring

jonnyb wrote: »

Obviously the above scenario does not apply to those who use their card regularly but pay off in full each month.

This describes exactly some of the people getting these letters. Why are they an increased credit risk all of a sudden?

jonnyb

what credit limits do you have ?
no need to give exact figures, but if the limit is way more than you ever use, try asking them to reduce the limit, instead of closing the accounts.
you have nothing to lose other than the cost of a stamp, or phone call, or evne a secure message via their web-site.

Bismarck

Basel II again.....we forget when the hype hits don't we.. We'd ummed and aaahd about this before Christmas and of course it's not straightforward

common sense vanishes and as some wit said earlier, we'll be loading up on cash, tinned food and ammo before this is over....if the press had their way....just a simple story with a clever covering message that has really hit the wrong spot.

the more I look at the modelling packages that are being used to see what deals we should get, the more I am not surprised that the person I speak to can't really answer my question other than the computer says so.

If they could explain how it all works, would they be allowed to?

I think it was the Daily Mail headline that really got me ...now the credit card crunch...you can't make a business decision without them hyping it up...bet there'll be fun tomorrow.

If all this makes people read their terms and conditions again then it's been a bonus...can anyone recall what the hype was like regarding Barclaycard as I didn't think it was this big?

Paul_Herring

jonnyb wrote: »

what credit limits do you have ?
no need to give exact figures, but if the limit is way more than you ever use, try asking them to reduce the limit, instead of closing the accounts.
you have nothing to lose other than the cost of a stamp, or phone call, or evne a secure message via their web-site.

Since you didn't quote anyone, who are you asking? Me?

If so, I have a £4000 limit on an Egg Money card (with no Egg Visa - closed that back in July '06.) And I had to fight to get them to raise it to that back in March last year because the £3000 limit they'd given me was insufficient at the time.

And I hardly think that 'asking them to reduce the limit' will in any way shape or form move Egg to allow you to keep the card open. They've gone too far to be seen to be backtracking.