Egg to ditch dodgy customers

[BrilloPad]

Do you have a link for this?

ooops - I apologize

http://business.timesonline.co.uk/to...cle3295315.ece

MBNA, the credit card giant, recently introduced annual charges for those who very rarely used their accounts.

[AtW]

Currently pondering how to piss them off

Apparently burning yourself in protest worked wonders for some Buddist monks.

[Dow Jones]

Egg on face

As already stated by another poster, in their letters to all customers whose cards were to be withdrawn, Egg said that they would not record any adverse credit, meaning that anyone continuing regular payments on their account would result in having a status of 00000000...., ie 100%.
Secondly, any assessment done may not centre on previous credit payments, but possibly on one's earnings vs total liabilities on mortgages, loans, cards, etc. Eg even if one has income of £ 100k pa vs £ 400k mortgage and total loan/card 'exposure' of another £ 100k, as opposed to one earning £ 50k with a small mortgage (say £ 100k) and a few loans/cards with total 'exposure' of say £ 10k, who do you think is the higher risk customer, even if he manages to pay on time? Experian/Equifax etc only show one side, not the whole picture. I am not defending Egg (read Citibank) and obviously not referring to any of the previous posters circumstances, however Credit Risk is a huge area for banks and very critical to future profits and future survival.

[Ardesco]

As already stated by another poster, in their letters to all customers whose cards were to be withdrawn, Egg said that they would not record any adverse credit, meaning that anyone continuing regular payments on their account would result in having a status of 00000000...., ie 100%.
Secondly, any assessment done may not centre on previous credit payments, but possibly on one's earnings vs total liabilities on mortgages, loans, cards, etc. Eg even if one has income of £ 100k pa vs £ 400k mortgage and total loan/card 'exposure' of another £ 100k, as opposed to one earning £ 50k with a small mortgage (say £ 100k) and a few loans/cards with total 'exposure' of say £ 10k, who do you think is the higher risk customer, even if he manages to pay on time? Experian/Equifax etc only show one side, not the whole picture. I am not defending Egg (read Citibank) and obviously not referring to any of the previous posters circumstances, however Credit Risk is a huge area for banks and very critical to future profits and future survival.

To shoot a hole in this idea is the fact that my total liabilities are shared with my wife. The only large outstanding debts we have are the mortgages and as they are in joint names they are liabilities for both of us. If you look at it this way my wife is the even bigger liability due to her reduced income yet she still has her card quite happily!!

[AtW]

"however Credit Risk is a huge area for banks and very critical to future profits and future survival."

No - it's the area of "Speculation" that's a huge area for banks and it has direct implications on their survival. Banks should not be speculate or gamble investors money on markets: they should not setup 3rd party companies like hedge funds for even riskier investments, if this was followed we would not be in credit carp that we are in now and the West would actually keep most of its industry.

[Dow Jones]

Same here

By the same (perverse?) logic, my wife (only p/t work) and I have a card from the same provider with her limit being twice as much as mine!

[Bumfluff]

I got the letter from Egg this morning as I mentioned in earlier post you cant get better than the Credit rating I have. Therefore Egg are getting read of non profitable customers, or somethere has f*cked up in there defination of a risky customer.

And a week prior to get this letter I increased my credit limit to a £1k woooo all automatically on there web site.

[PAH]

I got the letter from Egg this morning as I mentioned in earlier post you cant get better than the Credit rating I have. Therefore Egg are getting read of non profitable customers, or somethere has f*cked up in there defination of a risky customer.

And a week prior to get this letter I increased my credit limit to a £1k woooo all automatically on there web site.

I heard they paid Wipro to write that particular routine, and it's obvious amongst any who have had any exposure of Wipro (and other similar organisations) that they love to cut and paste, one size fits all. They're only believing the hype about code re-use.

[meridian]

As already stated by another poster, in their letters to all customers whose cards were to be withdrawn, Egg said that they would not record any adverse credit, meaning that anyone continuing regular payments on their account would result in having a status of 00000000...., ie 100%.

The problem may arise on other applications for credit or insurance. For example, my car insurance form asked, "Have you ever been refused credit for any reason whatsoever". An honest ex-Egg customer will have to answer yes, and possibly suffer increased premiums/interest rates.

[too_many_details]

did anyone see that documentary a couple of years ago about working at Egg? It was so funny, they kept on saying how they were individuals like they had been brain washed!!!!

I don't think anyone's in any doubt they are ditching non-profitable customers rather than just bad payers. Cherry picking!! Won't work though since they are so uncompetitive these days.

R