Online Bank Cancels Cards On "Risky" Customers

Egg, a Citibank-owned online bank in the UK, announced this past weekend that it’s canceling the accounts of 161,000 of its customers after “conducting a one-off, extensive risk review.” The future ex-customers will be able to pay off their balances according to current agreements, but in a little over a month the accounts will be deactivated.

The company has given seven percent of its credit card customers 35 days’ notice that it was ending their card agreements, [an Egg spokesman] said. “The credit profiles of affected customers had deteriorated between the time they joined Egg and the acquisition (by Citigroup) in May [2007].”

We wonder if this is an isolated event to reduce Egg’s risk, or if other financial institutions will implement this sort of pre-emptive strike against customer defaults?

“Web bank Egg withdraws cards from riskier customers” [Reuters]
(Egg: Getty)