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Egg boss quits after credit card withdrawal scandal

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by Kay Mitchell

The chief executive of internet bank Egg has resigned after the company was accused of withdrawing the credit cards belonging to 161,000 customers because they paid their debts in full and so were not profitable.

However, Egg has strongly denied this and claimed that the decision was taken after an extensive credit review following the acquisition by Citigroup last May.

The bank said Mr Kerr’s resignation was of his accord and was not related to the credit card cancellations.

Ian Kerr, who has headed Egg since November 2006, will be replaced by Bert Pijls, the country manager for Citigroup, Egg’s parent company, in the Czech Republic

Egg claimed that the customers, who represent 7% of its 2 million credit cardholders, had a ‘higher than acceptable risk profile’. However, all of those affected have excellent credit ratings.

The credit card cancellations represent 7% of Egg’s 2 million credit cardholders.

Labour MP Nigel Griffiths, a former consumer affairs minister, who has been highly critical of Egg’s actions. He said I don’t believe in pointing the finger and I have not been seeking Ian Kerr’s resignation but I think it gives a clear warning to all banks and credit card lenders that they must be frank with customers.

Egg presided over a PR disaster, withdrawing cards from thousands of perfectly respectable customers and failing to give full and honest reasons, concluded Mr Griffiths.

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News posted: March 12, 2008

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