Not upheld: irresponsible lending complaint against Clydesdale Bank Plc trading as Virgin Money

Decision detail

Summary

Mrs D complained that Virgin Money irresponsibly provided her with a £9,000 credit card in February 2023. The ombudsman found that while Virgin Money's initial affordability assessment relied on household income rather than Mrs D's personal income alone, the available evidence showed Mrs D had sufficient personal income to cover her household expenses and sustainably repay the new credit. The ombudsman concluded that even with more proportionate checks, Virgin Money would likely have provided the same credit limit. The complaint was not upheld and no remedy was ordered.

The Ombudsman's reasoning

The ombudsman found that while Virgin Money's checks were not perfectly proportionate (relying on household rather than individual income), the information gathered did not reveal evidence of financial difficulty. Mrs D's personal income was sufficient to cover her share of household expenses and sustainably repay the new credit. Even if more borrower-focused checks had been conducted, the ombudsman concluded it was likely Virgin Money would have provided the same credit limit. The firm's subsequent monitoring and Mrs D's response (increasing payments) demonstrated responsible management of the relationship.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website