Egg whisks up banking frenzy

Online bank Egg is being beaten by mainstream banks over its one-stop internet service that allows customers to manage all their accounts through one web page.

Barclays and Halifax/Royal Bank of Scotland (HBOS) have demanded to be taken off the system, which they have dubbed half boiled. Egg has refused, however.

HBOS claims that the service, which was launched last week, breaches Association of Payment and Clearing Services guidelines, which clearly state that banks should only be included if they have given consent.

Egg's Money Manager system stores encrypted passwords on a user's home PC with software provided by Egg. As the passwords are not disclosed to Egg there is, in theory, a greater level of security.

Andy Dellar, the company's director of banking, told BBC Radio 4's Money Box programme: "It has to be completely secure, it has to be completely legal, and it is."

But HBOS pointed out that under the Data Protection Act it has an obligation to safeguard customers' accounts.

It has warned its customers that they risk breaking their terms and conditions if they sign up to Egg's plan, and may find that they are not covered against fraud.

Egg claims that its service is compliant with the Data Protection Act, and said that if its security is breached customers will be reimbursed.