A story is breaking in the UK around internet bank Egg and its credit card business. According to the BBC, Egg has given 161,000, (around 7% of its customer base), 35 days notice that their credit cards will be stopped. The reason given by Egg is that the customers pose a credit risk and are likely to default on their payments as retail credit tightens.
But in a follow-up piece by the BBC, it seems that Egg may be being somewhat economical with the truth. It turns out that many of the customers who have received the Dear John letters regularly pay off their accounts in full and have in fact excellent credit ratings. And there’s the nub of the matter. Many of these customers are likely to be low profitability customers precisely because they do pay off their credit cards promptly. That means no revolving credit attracting interest charges. No late payment charges. No over the credit limit charges. And little or no profits.
I got fired by a recored voice message
As we like to say companies are from Mars and Customers are from Venus
On the BBC a person commented
It was only last week that I checked my Experian and Equifax reports both of which state I have an excellent rating – yet I received the cancellation letter yesterday.
Most confusing thing is that when I called Egg to discuss this they advised that it is only my Mastercard that has been cancelled and not the Visa card I also have with them – seems more like random selection to me.
I was also told there was no right to appeal. I feel sorry for the call handlers who are having to deal with the aftermath of this farce!
Go figure. Word I am looking for is inept