Partially upheld: default application; incorrect information about default avoidance complaint against Clydesdale Bank Plc trading as Virgin Money

Decision detail

Summary

Miss B complained about Virgin Money's default of her credit card account. Her account fell into arrears in February 2024, and despite a debt advice agency proposing £5 monthly repayments, Virgin Money issued a default notice in December 2024. Miss B claimed she did not receive postal correspondence due to postal service delays and requested email delivery. On 17 January 2025, a Virgin Money advisor incorrectly told Miss B that repaying the full balance would avoid the default; however, the default had already been applied. The ombudsman found Virgin Money properly applied the default in accordance with regulatory guidance and cannot be held responsible for postal delays, but upheld the complaint in part due to the incorrect information provided, awarding £100 compensation.

The Ombudsman's reasoning

The ombudsman found that Virgin Money properly applied the default in accordance with ICO guidance, which permits defaults after three months of arrears and recommends defaults within six months. Multiple arrears notices were sent and Miss B was informed of the consequences. Virgin Money cannot be held responsible for postal service failures. However, the ombudsman found that a Virgin Money advisor incorrectly told Miss B on 17 January 2025 that she could avoid the default by repaying the full balance, when the default had already been applied. This incorrect information caused disappointment and warrants compensation, though it does not entitle Miss B to have the default removed, as she would have been in the same position had she been correctly advised.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website