Not upheld: Mortgage administration / arrears handling complaint against Clydesdale Bank plc, trading as Virgin Money

Decision detail

Summary

Mrs S complained about Virgin Money's handling of her credit card account after it was blocked in July 2025. Although Virgin Money made errors in communication (telling her the account would be reinstated when it would not) and caused delays in removing the restriction, the account went into arrears because Mrs S did not make required monthly payments. Virgin Money sent multiple letters about the arrears, issued a default notice, and ultimately terminated the account when Mrs S failed to pay. The ombudsman found Virgin Money acted within its contractual rights and that the compensation already offered (totalling £350 in credits plus credit file amendments) was fair and reasonable, declining to uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that while Virgin Money made errors in communication and caused delays, it acted within its contractual rights to apply the account restriction and was entitled to default and terminate the account when Mrs S failed to make required payments. Mrs S had responsibility to make monthly payments and could have contacted Virgin Money or made payments through other means despite the restriction. The compensation already offered (£100 in September, £200 in November, and £50 for poor service) was deemed fair and reasonable for the distress and inconvenience caused. Virgin Money's reporting to credit reference agencies was found to be true and accurate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website