UK Officials Examining Internet Bank Egg

NEW YORK (Associated Press) - Britain’s Office of Fair Trading said Tuesday it had received a complaint against the Internet bank Egg’s decision to cancel more than 160,000 credit card agreements and was considering whether to investigate. Egg, one of the largest online-only banks in the world, said earlier this month it was clearing some 161,000 credit card customers from its books, explaining that their credit profiles had deteriorated.

Some customers disputed the assessment, complaining their cards were canceled because they regularly paid their balances in full, denying Egg profitable interest charges. Labour lawmaker Nigel Griffiths said he complained to authorities because he suspected that the bank, which was bought by Citigroup Inc. for more than $1 billion last year, was not telling the whole truth.

Egg has insisted the letters it sent to customers canceling their agreements was the result of a risk review which followed its purchase by Citigroup. “It was not, as has been suggested, an excuse to exclude some ‘unprofitable’ customers,” the company said in a statement released Monday. Griffiths allowed that a risk review might have been ordered at Egg following its acquisition by Citigroup, but said the U.S. banking giant did not appear to have handled it well.

“Citibank obviously had big writedowns, because of the subprime issue,” Griffiths said.