Since the Internet financial giant Egg announced its decision to withdraw the credit card facilities of 161,000 customers, there has been a great deal of controversy, with industry professionals, government officials, and consumers launching verbal attacks on the lender. Egg has been accused of cancelling credit cards because the cardholders were good payers and therefore did not generate enough profit, but Egg officials have insisted that the reason behind the cancellations was that the cardholders were a high risk or were likely to become a high risk.
Recently the former foreign affairs minister and Labour MP Nigel Griffiths announced that he was meeting up with the chief executive of Egg, Ian Kerr, in order to discuss the situation. Griffiths set up the meeting in the hope of getting an explanation and an apology from Egg.
He stated: "Egg has got a lot of explaining to do. If you want to get rid of customers who are not bad credit risks but who you just don't make money out of, then you should make a charge for your card." He added: "Egg's job now is to prove they have an honest intention in this. They made a mistake, we need an apology and compensation for wasted credit agency checks."
However, it seems that all did not go to plan, and with the meeting now over Egg has confirmed that there will be no change in policy, which means that affected customers will have to start looking elsewhere for another credit card.
Speaking about the recent review after which the 161,000 accounts were cancelled, one Egg official said: "The review was based upon a large number of variables and studied the level of risk inherent in groups of customers, rather then every individual. So while some customers in that group may be up to date with their payments and have a good record with credit reference agencies and so on, the probability of them becoming a higher-risk customer in the future is higher than we wish to accept."
Whilst the meeting between Kerr and Griffiths was described as helpful and constructive, it seems that Egg customers will not be getting their apology or getting their accounts re-instated. However, Mr Griffiths did manage to achieve something from the meeting, stating: "I expressed my strong concerns about the letters sent to customers, particularly since I felt that more information could have been provided. I have received an assurance that Egg will ensure that the credit record of these card-holders will not be affected, as long as they keep up their agreed repayments."
Not quite the conclusion that the victims of the credit card scandal had been hoping for perhaps...
