Egg, Citigroup could face probe over credit card claims - report

LONDON, Feb. 11, 2008 (Thomson Financial delivered by Newstex) -- Egg and its owner Citigroup (NYSE:C) Inc could face an investigation over allegations that the UK internet bank cancelled credit cards because holders consistently paid up in time, according to a report.

The UK's Financial Services Authority has referred a British lawmaker's complaint about the issue to the Office of Fair Trading, The Guardian reported.

Last month, Egg said it planned to end the customer agreements of a proportion of its credit card portfolio.

It said the 161,000 card holders affected had a 'higher than acceptable risk profile', according to The Guardian.

However, many of those said they paid their bills in full every month, never went over their limit and had excellent credit ratings.

Egg denies the claims alleging that it made the move because the customers were not making it enough money, the newspaper said.

The Labour Party lawmaker who made the complaint, Nigel Griffiths MP, said he was 'very pleased' about the FSA's action.

Citigroup acquired Egg from UK insurer Prudential PLC (NYSE:PUK PR) (NYSE:PUK PRA) (NYSE:PUK) for 1.13 bln usd in cash last year.

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