It's all relative
If this happend on the Barclays site it wouldn't be newsworthy - only a couple of days ago I tried to check my balance and the site was barely functioning.
Egg has returned its website to normal operation after a "serious network outage" forced it to temporarily suspend services on Tuesday. The UK-based online bank took its website down following an "internal network failure" at around 1100 GMT on Tuesday. Services weren't fully restored until around 1200 GMT on Wednesday. A …
If this happend on the Barclays site it wouldn't be newsworthy - only a couple of days ago I tried to check my balance and the site was barely functioning.
What's wrong with Egg closing unprofitable accounts, it's their service, they can do what they like with it. I saw someone being interviewed about it & they said they couldn't understand why their card was being withdrawn because they paid it off every month and therefore considered themselves a model customer. What credit card companies want are customers that push a high volumes of transactions through their card (merchant fees - kerching!) and keep an outstanding balance (interest fees - kerching!) whilst meeting the minimum payments every month (no risk of bad debt).
Egg is a commercial financial services provider not a public service, why do people expect to get something for nothing? If you don't need the credit facilities, get a charge card - why do you think they tend to have a subscription fee?
you are quite right
i seem to max out my egg card every couple of month. once a quarter i probably miss a minimum payment (although admittedly i do pay it again once pay day rolls around)
and because of other missed payments on other cards, i'm sure my credit score has deteriorated over the past couple of years
yet i still have my egg account in full working order
i wish they would close it - i currently owe them 4 grand on my card and it'd be nice if they just decided to write that off :)
That's a fair point - they're under no obligation to offer anyone credit. However, to publicly declare that it's because of poor credit ratings is akin to slander...
Are you telling us they don't make a profit on the transaction fees? I don't believe it. How could they be so inefficient?
The issue is though that the people who are 'unprofitable' received letters stating that their credit rating was risky and therefore Egg were cancelling their cards.
Fair enough to cancel them saying they're not profitable - but don't accuse them of having a poor credit rating just because you want to get rid of them. Could that be libel?
I for one will be closing my Egg account off the back of this. Been with them 7 or 8 years, and only had one run-in with them over online statements – when I found out *too late* that they only showed a rolling history, and it was up to me to print them off before they fell out of view.
However, CitiBank are in deeeep financial doo-doo, and this move smacks of:
3. Seriously bad PR.
Would *you* now trust Egg to give you a line of credit that they can call at 1 month’s notice (which I believe *is* the standard credit card term)?
I can spend up to 7 weeks away from “home base” and rely on my plastic for paying hefty hotel bills – which I *eventually* get back from the client. Egg will be getting their card chopped up and sent back to them this weekend.
I don’t believe for one second their story about “adverse credit” – too many people are saying they have perfect credit records and pay off the card every month and hence Egg not making dosh from them. Sounds much more like a cull of loss-making clients wrapped up in a semi-believable “bad credit” excuse. Or, a quick way to get hard cash. If each of the customers had 5k credit and are the type of client who can pay it off immediately, that’s a whopping £805 million in cold cash CitiBank would harvest. Given their dire cash situation, it could well be this…
IT angle? Gotta love the power of news site “comments” pages. Prior to the ‘net, companies could get away with extravagantly blatant lies when the customer base was Joe Public. Now, the BBC was onto the “something fishy” angle within hours.
@Egg Nog - the reason is cos they are lying. If they were honest and said this, then fine. They're not - and I wouldn't be surprised if someone sued them for defamation...
Egg has never said it was closing the accounts because they are unprofitable. If they were up front about that I wouldn't have a problem as you say Egg is a business not a charity.
Egg however spread the word that accounts were being closed because those customers presented a risk and that their credit rating had dropped. This alarmed those customers who didn't do the usual credit harming activities like miss payments and go over their balance.
I don't know why they just didn't tell customers the truth.
Yeah - I think its because they are paying it off every month, and thats fine. My credit rating took a bashing this year because NTL (not Virgin) decided to put some incorrect details on my reference file... but because I'm still paying off a big balance on the Egg card this is the first I've heard of any culling.
Incidently - the culling isn't the problem.... the big problem is when you have banks like Barclays that will reduce your credit limit by about £300 without warning, turned out it was in the small print of a statement I had recieved, a month after the change occured.... which was nice of them.
...just cancelled their card. They are still required to repay the balance, at existing arrangements - they just cannot spend anymore. So they're not making you repay everything with 1 months notice, nor are they writing off the balances.
There is a lot of talk on the money forums that rather than the 161,000 customers being 'high risk' the actual egg bank is the 'high risk'. I had 42,000 in savings with them set against a mortgage of £52000, yet my card was cancelled - never missed a payment/overlimit.(with them or any of my cards) I've taken out my savings and put it into savings elsewhere for a while just in case there is a run on the bank by disgruntled customers (which could be the reason for the outtage - to prevent mass withdrawals. It wouldn't take many of these customer removing their cash to cause concern to the bank's credit status and financial stability, its starting to look that way.
"You know where you are with Egg"
How's that then? Do their new cards have GPS built in?
It can't be libel as they are not naming the people concerned thefore how are they defaming the complainants?
Its a fact that if you use credit facilities properly, you have a better credit rating than if you do not use them at all. Lenders want to see a credit history because someone who has taken credit out and proven they can stay on top of it is a safer bet than someone who they know nothing about. Such a person may prove to be super awesome, but also could be useless.
I could therefore understand how people who use their cards lightly could see their rating deteriorate.
Who's to say the great unwashed are telling the truth anyway? I know that if *I* were to have *my* card cancelled because of a deteriorating credit rating that I wouldn't go telling everyone about it. I'd probably claim it wasn't my fault and that they shouldn't have done it.
Agree about bad PR - doesn't matter what they do, it's not a public service but where was their subtlety?
I have now moved my spending onto a new card with a nice fat 0% for 15 months.
I have been with them for years but I simply don't like the fact that when times are good and credit is cheap then they say nothing and then now the close down on 15000 people.
It could be anyone next - but it won't be me!
"However, to publicly declare that it's because of poor credit ratings is akin to slander"
Not true, if anyone were guilty of slander, it would be the credit scoring agencies, and that would only be the case, if what they were saying was untrue.
...and in fact, in that case, it would probably be whoever told the agency the bad information who had actually committed slander, unless the agency themselves had 'made it up'
Egg Nog/Anonymous Coward is quite right; any credit company is entitled to refuse credit to someone who is a credit risk (which in the case of credit card companies, includes withdrawing the practically unrestricted ability to obtain further credit, by withdrawing the card).
...and in fact, if anything, credit companies are often guilty of giving too much credit too easily (if what I read in the press is true).
...and in fact, Egg should in all likelihood be praised for not giving too much credit to people are a credit risk (yes yes, I realise that there are questions over the way that they have done it - they could, for example reduce the card limit for riskier people - and that this doesn't apply to the reported withdrawal of services from zero balance customers, but, I'm sure that there are many credit-opponents who would argue that this is a step in the right direction)
After the final straw in customer non-service from Barclaycard, opened an egg account, and did a balance transfer.
No email, no reference code, and it turned out 10 days later, no balance transfer.
I re-did it, fuming on the phone to an egghead - went through.
However, as I pointed out to her, no audit trail on the account login, no emails coming out, no generated reference number ... I imagine egg customers get into a lot of he said/she said disputes .....
While there's something in what you say, it's a question of scale and how many people are shouting on this one.
Furthermore, someone who really does have a deteriorating credit rating and knows it probably wouldn't say anything at all about this - they'd be more likely just to accept it and let it go. I don't think they'd want to kick up a stink over it and draw attention to themselves.
Egg might indeed be dropping some risky accounts, but they do also appear to be dropping lots of accounts that aren't risky, but which also don't make them any money in interest fees and charges. As another poster has said, if they were up front about it and said as much, fair enough. But they keep sticking to their "risky customers" line in spite of a growing number of counterexamples coming out of the woodwork.
Given that Egg is now owned by Citigroup (who took one of the largest financial hits in the sub-prime lending debacle in the US), there really does seem to be a rabbit away somewhere with this one. Including the mysterious website outage.
Pirate icon, 'cos I think Egg/Citi (and most banks) probably are...
"Would *you* now trust Egg to give you a line of credit that they can call at 1 month’s notice (which I believe *is* the standard credit card term)?"
They can't call in the entire debt at 1 month's notice, they can only "...end this Agreement at any time. We will normally give you 30 days' advance notice..." The repayment terms, in particular minimum monthly payments remain the same, and cannot simply be increased.
They've been going down the pan for a while now since the Pru got rid of them (obviously wasn't profitable to them either). Before throwing out the Egg they also got rid of the stock ISAs to Fidelity (still waiting to make a profit on them after nearly 10 years!).
They're still running the same antique online system they first put in place, complete with easy to keylog login page, whilst most others are moving to UberSecure systems (so secure it's almost impossible for valid users to log in!).
Still, I kept hold of the Egg shares when they reverted to Pru and the Pru shares are just about break even for me! I'm sure I'm better off that way though than if I'd been given Sh*tygroup shares or just taken the cash offer.
I've always avoided Citygroup as a credit card issuer due to bad reputation and their American attitude (screw the customer).
My advice is to move over to Nationwide. Last (or one of the last) of the mutuals. No shareholders and has the member's bests interests at heart. That's why they do things like no transaction fees on foreign transactions, and actually let me have house insurance at a reasonable cost rather than just flat reject me for being near a flood plain because the shareholders wouldn't accept risky customers.
I think 'risky' accounts can be interpreted in another way, that might make more sense.
I think 'risky' accounts are those which Egg is risking not making a profit from, not those which are at risk of missing repayments.
I was one of the lucky recipiants of Egg's "fook off you sanky scum" letter.
Like most; I been with them for about 6 years, paid well over the minimum payment and not missed a payment (well not for a couple of years).
The thing I object to is the tone of the letter! It's quiet frankly rude and offensive :-/
I'll now be paying off my balance in full so the ignorant bar stewards can't earn another penny from me.
From articles written around the time of the run on NR then egg is has already got this covered ... their T&Cs (which you've agreed to if you've an account with them) allows them to decide unilaterally to suspend all withdrawals from accounts for upto 6 months.
@Steve Sutton"They can't call in the entire debt at 1 month's notice, they can only "...end this Agreement at any time. We will normally give you 30 days' advance notice..." The repayment terms, in particular minimum monthly payments remain the same, and cannot simply be increased."
Things could well have changed, or my recollection is dodgy (probably the latter). The only time I went through the entire credit card agreement with a fine toothcomb was around 12 or 14 years ago, and I thought the credit card companies *could* call the entire debt if you were in breach of contract, and (adverse) material changes in your financial circumstances (e.g unable to make the minimum payments or loss of job etc) was in effect a breach of contract. That was one of their arguments for selling the ripoff PPP at least.
My main point was more that how can anyone trust Egg, rather than their calling the entire debt. If I'm on the road for a while, the absolutely last thing I want is the worry that my card provider has made a unilateral decision to switch me off in such short notice - leaving me with a few grand of a hotel bill and limited alternatives. I do have backups - both Visa and Mastercard for instance since some countries are funny with one or t'other. I've seen more than one colleague have to desperately get spouses to Western Union dosh out to avoid the local jail thanks to card issues. Hence Egg are off my list.
"Not true, if anyone were guilty of slander, it would be the credit scoring agencies, and that would only be the case, if what they were saying was untrue."
I believe that is the entire problem, some/many of these people do NOT have bad credit but are 'unprofitable', yet Egg has spread around that they DO have poor credit. If that is the case then perhaps it is slander by them as the credit rating companies don't have them listed as bad creditors.
The 'bad credit' angle by Egg is most likely a spin attempt to have come across as a responsible lender doing its bit for customer welfare when the customer can't restrain themselves from spending... Just a guess, but the shoe sounds like it fits ;)
Fool me once, shame on you. Fool me twice?
Now that's the interesting bit: anyone still with an Egg account needs to accept that Egg will shft them at the slightest opertunity if it makes them more money (or your demographic does: the costs with actually looking at you in particular are far too high)
So how to protect yourself (in the same manner as Egg have protected themselves): Take your money (and/or debt) to somebody less blatant about not giving a hoot what harm their actions may cause you. Do it now and do it quick. Before they collapse.That's why the site went down: they don't want you getting at your finances, pure and simple. Slow you down and a Northern rock might not happen they hope.
Make that a vain hope.
"Given that Egg is now owned by Citigroup (who took one of the largest financial hits in the sub-prime lending debacle in the US), there really does seem to be a rabbit away somewhere with this one. Including the mysterious website outage."
Is there such culling on US customer accounts, for the same obviously obscure reasons, or are they only stirring things up in the British economy. Has word got out about the Golden Goose and AI NeuReal Technology?
I got a letter from Egg recently about my card, but not about cancelling it. They gave me 30 days notice that they were putting up my interest rate to 21.9% from 17.9%. A few days after this they advertised a rate of 16.9% on the front page of their site. I emailed to ask how it was that they could advertise a low rate and give me personally I high one, and I was referred to a ToS where it basically said they can change the interest rate any time they want with 30 days notice - and they can do this on an individual basis. i.e. they can write and tell you that your 'personal' interest rate is going up to 95% and it's in the ToS that you agreed to.
Needless to say I transferred the (not megabucks) balance elsewhere.
I've been annoyed at Egg for some time though - ever since their site migrated to Windows servers (and I'm not bitching about Windows, it's just when it happened) things started going wrong - for example, you *still* cannot reply to an email that they send you on the site (after about two years of complaints), you can't send email from the page that says you have failed to reply, and you can't edit your debit card details for Egg repayments - i.e. if your (non-Egg salary bank account) debit card expires and you need to update the details with the new expiry date to be able to make a payment off your Egg card, then you can't. You can add a new card, but for a bank that is 'online only' for core parts of the site to be broken for YEARS is simply a disgrace.
The other ****ing unfathomably annoying thing they do is disable your card without telling you. Needless to say you only find out when you are trying to buy a train ticket in a foreign country wondering why your credit card will not work in the machine before you decide that it might be damaged.
Very, VERY annoying. Once my loan is paid off I'm away from them for good.
Maybe anonymous (a la against evil scientology) got his card cancelled, bingo, site down...Or is egg run by scientologists? Perhaps the egg card was burried deep in a volcano next to Tom Cruze's body. Oh yeah.... yeah... save the world baby! only we can make a difference etc...
Nope, you are correct that they can call in the entire debt if you breach the contract, but not if they merely end it for business reasons.
In your case, the 30 days notice would appear then, to not be enough, but for most people they will at least know before they go on whatever trip. Yes, perhaps it is inconvenient, but that is their prerogative, and back to my earlier point, they are under no obligation, whatsoever to lend you money, if they don't want to.
Frankly, if you* were sensible (and I'm not either), you would make sure you had the money to spend before you go, not rely on borrowing it, when it comes time to pay (okay, okay, I know we're all used to the idea of credit on tap via cards and overdrafts, but it would not surprise me at all, if other credit cards made similar moves in the near future. If the 'credit crunch' is coming, people will start having to get used to the idea of not having so much on tap credit). Alternatively, if 30 days notice is not enough, you should arrange for credit that *will* be available when you need it. Egg, and other credit card companies do make it clear in their small print (oxymoron acknowledged), that they can end the agreement by giving 30 days notice - if this is period is inadequate for your purposes, find another lender.
* when I say "you", I don't mean to be personal, I just mean people who expect to have credit on on tap, in general.
WRT trusting Egg, Just because they are the first to do this, doesn't mean they will be the last! Most credit cards have similar terms, and as I said, I wouldn't be surprised if others follow suit - I don't think that others are any less susceptible to deciding to make such a move.
Sorry, I must have missed it, but I've not seen any evidence of Egg going round telling anyone that anyone else has bad credit! http://www.egg.com/scumbags-what-don't-pay-their-bills.html doesn't exist. Maybe they were misleading in how they announced this move (I've not seen any actual press release), but they certainly haven't lied about any specific individuals AFAIK.
Totally agree with you though, from what I *have* heard, it would appear that they said one thing and that this would appear to be at least in part BS, which is unacceptable.
"...but wondering how to cause maximum administrative burden/cost? Leave £20 on the card and pay minimum payment every month?"
Things may have changed since I last looked into this (2001), but you are actually better of making an overpayment of lets say 20 GBP and leaving it there.
Each cycle the balancing programme needs to generate a virtual transaction to handle the excess credit. This will appear on a variety of audit reports that will need to be signed off by the supervisor each month (after being investigated etc).
The lost interest on the 20 GBP is neglibible, whereas the cost to the firm is sizeable in terms of (time spent) * (salary).
That was the state of play for me in 2001, IT may have moved on since then, or it may not.
... There is plenty to say about Egg.
1. Paypal payment done on your Egg cards is not considered a cash advance, but Neteller was. Their argument was that Neteller was usable to extract cash from your credit card. Wow. So are credit card cheques or Paypal. In fact, MoneySavingExpert.com gave you ideas how! I had a very long argument with them about this, mostly because Neteller was a service that allowed people in countries WITHOUT Paypal to accept payment from the rest of the world (South Africa being one example - you can use Paypal to PAY, but not RECEIVE payment).
2. The login page is somewhat disconcerting, isn't it? Keyloggability is something that should not happen but we know that it will. I've raised this with Egg time and again. No response.
3. The problem with credit card companies (and now Egg) is that:
- If you only pay the minimum after using balance transfer deals, you are likely to be tarting. Tarting costs the card company, not you (well, it costs you 3.5% + interest over the tarting period, but it's less than what your deal costs the card company).
- If you always pay your balance on time, you are costing the card company (free credit) even if the company makes that a marketing thing (up to 58 days free* credit - blah blah fishpaste). You are borrowing money for the period up to your interest date. You are not generating the company money.
4. Egg is not killing the cards of those with loans, those who use their card a lot and only make partial payments (I pay a quarter of my outstanding debt a month, but spend that same amount on the card, so the company earns three months of interest out of me at any given time). You are probably not going to have your card cancelled if you have both Egg Money and Egg Card (former a MasterCard with cashback, latter a Visa).
They are dumping those whose credit profiles no longer match what they would prefer to have (people who generate interest for them, who are likely to pay back more than the minimum amount but not the complete outstanding).
There is always the possibility that marketing/public relations took what they were given from risk management and tried to spin it to something more palatable, and ended up scaring the bejezus out of those who had excellent credit ratings, who paid on time and who paid everything off before the cut-off date. When I see what public relations sometimes spins out into the world while having an inside line into what was really the case, I would not be surprised.
That said, Citigroup and Bank of America now own the two major, third-party credit card vendors in this country. MBNA is owned by BoA. Citi owns Egg. Who is left? Considering the crap you get from the British banks (9 of them trying to weasel their way out of their overdraft mess with the OFT), why would you want to trust them with your money? Just because they are British? Get real.
Sorry if this is a trivial point but I just had to get it off my chest.
A number of years ago I received a letter from my bank informing my that they would be cancelling my Mastercard. The letter went something like this;
"Dear Mr x,
We are sorry to inform you that due to a lack of activity on the account we will be cancelling your credit card facility (blahblahblahblah),
Yours Sincerely x"
I had no problem at all with that, and I'm still a customer with the same bank. Never thought any more about it for years.
The letter I received from egg on Friday started off, in strident bold letters,
"Cancellation of egg credit card xxxxxx" (or something very similar).
The greeting line below the message above carried no pleasantry, just a stark "Mr x".
There was no apology for withdrawing the facility (which I have never missed a repayment on by the way), nor was there a Yours Sincerely at the end.
Now, I'm quite aware that egg are a business and aren't my friends. I also don't care for what reason they are cancelling my card, I could be up to my man-boobs in debt and not paid them for five years, they could have caught me downloading startling quantities of midget porn or paying for ladyboys in Thailand, makes no difference.
Here's my point (finally); surely a tiny bit of politeness and good grace wouldn't have gone amiss would it? Or were they trying to save ink? Or does it just not matter any more these days?
Looks, like I owe egg an apology. Just fished the letter out of the bin and it does start "Dear" and end "Yours sincerely".
Still a horribly rude letter though. No "Sorry to inform you" or "Thank you for your business" - even if they didn't mean it!
you're absolutely right! Citibank is NASTY! Last September they sneakily changed their "terms and conditions", saying they will move all their customers details to foreign countries where there "might not be data protection laws" and said that all their customers agree to that! F**K THAT!
Thanks God I noticed this, written in a very minuscule statement that came with some brochureware!
I immediately went to open an account with Nationwide and closed all my business with Sh*ttybank.
And since I found out the sharks bought Egg, I moved all my savings to IceSave.
The thumb upimage?: Consider it a 2 fingers for the City*ankers...
From trustworthy Citibank:
43.4 You consent to have your data transferred to other countries (including countries which do not offer adequate personal data protection) and You agree that if Your data is required by another country's laws or regulatory rules to be disclosed to that country's regulators, authorities or law enforcement agencies it can be so disclosed.