Controversies
On 2 February 2008, Egg chose to cancel the credit cards of 161,000 (7%) of its customers. The bank gave customers 35 days' notice, after which they would not be able to spend more on their cards. While publicised as an attempt to purge "risky" customers from their books, many affected customers came forward with claims that they had excellent credit histories. This led to speculation that the move was an attempt to remove customers who did not accumulate interest on their accounts and therefore did not generate profit for the bank.
The Financial Services Authority fined Egg £721,000 in December 2008 for the persistent misselling of payment protection insurance (PPI) on its credit cards. The authority's director of enforcement, Margaret Cole, said "Egg used inappropriate sales techniques to try to persuade customers to buy payment protection insurance on their credit card, even when they asserted they did not want the cover."
During 2008, Egg attempted to have one of its customers jailed, saying the chip & pin cards were 'uncloneable', and the customer was 'clearly lying' about transactions from an ATM. The police arrested the customer, however after much investigation, the case fell apart.
Read more about this topic: Egg Banking