Not upheld: arrears management, interest calculation on arrears, credit reference agency reporting complaint against Clydesdale Bank Plc trading as Virgin Money

Decision detail

Summary

Mrs P complained to the FOS about her mortgage account with Virgin Money, seeking a breakdown of how interest on arrears was calculated and confirmation of how her overpayments were applied. This was a follow-up complaint to a previous FOS decision from June 2024 on the same issues. The ombudsman found that VM charged interest in accordance with the mortgage terms, that statements clearly showed overpayments reducing arrears, and that CRA reporting was accurate. The complaint was not upheld, and the ombudsman advised Mrs P to seek free debt advice given VM's consideration of legal action.

The Ombudsman's reasoning

The ombudsman determined that VM was entitled to charge interest on arrears as permitted by the mortgage conditions. The mortgage statements provided by VM were in FCA-prescribed format and clearly showed how overpayments were applied towards reducing arrears. The ombudsman found no evidence that VM provided inaccurate data to CRAs, and noted that the account had legitimately been in arrears for many years with no payments made for almost a year. The ombudsman declined to reconsider issues previously examined in the June 2024 complaint and clarified that the FOS cannot order lenders to suspend legal action.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website