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Egg recently closed my account, and since they have done so have actually raised the interest on my account to 26.9%. Is this legal? Can anyone help with questioning the validity of their policy?
"We are sorry that some of the 161,000 Egg credit card customers who we wrote to last month were upset by our decision to stop them spending on their cards from next month. We confirm the letters were the result of a one-off, post-acquisition review of our 2.2 million Egg credit card customers. It was not, as has been suggested, an excuse to exclude some 'unprofitable' customers.
"In this one-off review we assessed that the credit profiles of these customers had deteriorated from the time they joined Egg until the time Citi acquired Egg in May 2007 and that they presented a higher than acceptable credit risk to the bank.
"Risk assessment models are widely used in the industry. They use a number of criteria to predict borrowing behaviour, including behavioural data and information from external bureaux, to predict the level of risk inherent in groups of customers. We accept that not all of the individuals in the review may be high risk or will default, but the probability is higher than we wished to accept against our internal benchmarks.
"We are confident that this risk assessment was effective and that the selection criteria were properly applied. We stand by our decision but will of course review any complaints arising."
A spokesperson for Egg adds:
"As previously advised, customers will not be able to use their Egg credit card once the notice period has ended, but can continue to pay at least the minimum monthly repayment, continue with their current monthly payment arrangement or have the option to pay their balance in full. Egg is not asking for immediate repayment of balances or making any changes to their current terms and conditions or interest rates.
"Egg has over 2 million credit card customers and given only a small number (7% or 161,000) of them 35 days notice that it is ending their card agreements. Hence 2 million, or 93% of its credit card customers, are not affected by this review."
excellent, I have included that little quote in my letter to them:
Dear Sir/Madam
Re:− Account/Reference Number **** **** **** ****
With reference to the above agreement, I would be grateful if you would send me a copy of this credit agreement.
You have recently closed my account without providing any rationale for doing so, despite two separate requests I have received the same answer “I'm unable to give you specific reasons why your Egg Card has been closed.”
A Spokesman for your company recently said the following:
"As previously advised, customers will not be able to use their Egg credit card once the notice period has ended, but can continue to pay at least the minimum monthly repayment, continue with their current monthly payment arrangement or have the option to pay their balance in full. Egg is not asking for immediate repayment of balances or making any changes to their current terms and conditions or interest rates.” Can you please advise as to why my interest rate, since the closure of the account, has been raised to 26.4%. I am sure the Financial Ombudsman, Watchdog, the media and my Member of Parliament will also be interested in your response.
that has happened to me as well - can they do that when the credit agreement states the interest rate is at 15.9%?
Egg could say they did announce they were not going to raise the interest rate on or after the date of withdrawing credit card facilities, but that they are raising the rate ahead of closure in 35 days, for commercial reasons unrelated to account closure.
161,000 cardholders could of course arrange to say in unison:
Hi further to my letter for a CCA following my card being cancelled the Egg have now written to us offering us our charges back??? I called them today to say I would like this sent to me by a cheque but they have refused saying it has to go onto my account as I have a balance?
Can they do this? I now cannot use the card with the high interest and cannot have access to the money they say I am due? They have NOT supplied the CCA?
If the unlawful penalty charges they piled onto the account have stayed in the account, i.e. have not been paid off by the cardholder, it would seem difficult to oppose Egg applying the credits to the same place where the original debits were first applied.
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PS. If unlawful charges had totalled say £300, and subsequent to their appearing on statements they were paid off (ideally in full), so that the current debit balance is due to subsequent spending rather than the remnants of unlawful charges, then it could be put to Egg:
(1) As charges had previously been paid off by the cardholder in cash depriving himself of the use of capital, so the refunding of charges ought to be in cash direct to the cardholder to compensate for his deprivation of capital.
(2) The current debit balance has been agreed publicly by Egg a few weeks ago, for paying off at the rate of minimum payment per month. Egg cannot go back on their public undertaking and escalate this rate of minimum payment, using unilateral force to refund unlawful charges treating them as involuntary payment over and above the agreed rate of monthly payment.
But if charges have not been previously paid off by the cardholder, then much harder to make the above points.
Egg
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Originally Posted by Gismocat
