Byline: CATHY SIMMONDS
ONLINE banks are being called to account by Financial Mail readers.
Asked if services from the new internet banks were up to scratch, the overwhelming answer was No.
Prudential offshoot Egg came in for most criticism. More than nine out of 10 critical letters were about its products.
The complaints were depressingly similar. One reader writes: 'Every time I have tried to deposit money with Egg I have been thwarted by system failures.' Another complains: 'To gain access to
Another complains: 'To gain access to the system is an obstacle course in itself. Far more data than the typical user name and password has to be entered. Commonly, the data has to be entered three times and even then the system is unreliable.' Another says: 'Contacting the Egg helpline took ages as it was constantly engaged. When I got through they promised things could be sorted and was told to try the web again. Still nothing worked.' Egg offers a savings account, credit card, loan and mortgage service, all of which can be arranged only through the internet.
Competitive interest rates have sparked huge demand for Egg's products.
The savings account pays 6.3% gross, for example, while the annual interest charge for the credit card is just 9.9%, one of the lowest on the market.
Applications are flooding in at more than 3,000 a day while Egg continues to
advertise heavily. But readers say Egg has hatched more business than it can manage. Reader Steve Simpson is one of many who have experienced problems since applying for the credit card in September. Steve, a civil servant from Newcastle upon Tyne, is still waiting nine weeks later.
Steve, 49, says: 'According to Egg, the application process should have taken 15 minutes online.
'I must have spent four hours on different days plus three phone calls before I was able to complete the application form successfully.
'The system kept crashing after the second page of the form. I called the helpline and was told they had been inundated with applications and suggested I try at quieter times, such as after midnight.' Steve received a con- sumer credit agreement with a request for his signature and Egg said he would have his card 10 days after returning the form.
Last week there was still no sign of it, even though Steve had repeatedly contacted Egg by phone and email.
He says: 'When I contacted Egg, they apologised and claimed that my application had been pushed to one side and would be dealt with shortly.
'A month later, they admitted losing my form, so I was sent another, which I completed and returned immediately.
Two days ago, they said they had technical problems and could not call up my details on screen to explain the delay in sending the card.
'Egg cannot continue to blame high volumes of users. Surely, they realised that by offering such a good interest rate the credit card would be popular?
'This fiasco has put me off using the internet to buy financial products in the future.' There have also been problems over balance transfers from other credit card companies. Egg promises to charge only 4.5% annual interest on balance transfers for the first six months. However, Financial Mail readers say delays mean that some of them have faced late-payment charges from previous credit card lenders.
Financial Mail asked Egg chief executive Mike Harris to respond. He says thousands of customers are entirely happy with Egg cards and accounts, but admits others have had problems.
He says that if customers have lost out because of slow balance transfers, for example, they should ask for compensation.
'Our service has been miles from what we intended it to be and things have gone wrong with our website and helpline,' he says.
'But we have upgraded our systems and boosted staff numbers, and believe our service is improving fast.' In the New Year, Financial Mail will be asking readers if this is the case.
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