MP demands inquiry after Egg shows card customers the door

Egg may be investigated by the Office of Fair Trading (OFT) over its decision last month to terminate the contracts of 161,000 credit card customers.

Labour MP Nigel Griffiths, a former consumer affairs minister, has written to the OFT asking it to step in. He says he has received complaints from constituents that they have been unfairly branded a bad credit risk by the online bank.

He adds that many Egg customers claim they pay back their card balances in full every month and do not miss repayments, yet have still had their accounts closed on the grounds that they pose an unacceptable risk.

Mr Griffiths believes that while the bank has the right to cancel its customers' cards, it should not be allowed to give a misleading reason for doing so.

"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," Mr Griffiths explained.

Egg has vehemently denied that it has been misleading in the reasons it has given for cancelling cards. But Mr Griffiths, who met with Egg's chief executive last week, remains unconvinced. He says that if it is proved the bank has unfairly branded customers a bad risk, it should have to apologise and pay compensation.