Upheld: irresponsible lending complaint against Clydesdale Bank Plc trading as Virgin Money
Financial Ombudsman decision DRN-6275487 of 2026-05-05T00:00:00+00:00. irresponsible lending complaint against Clydesdale Bank Plc trading as Virgin Money. Outcome: Upheld.
Decision detail
| Reference | DRN-6275487 |
|---|---|
| Decision date | 2026-05-05T00:00:00+00:00 |
| Firm | Clydesdale Bank Plc trading as Virgin Money |
| Product | credit card |
| Claim type | irresponsible lending |
| Outcome | Upheld |
| Remedy | Virgin Money must: (1) transfer any debt back from recovery agents; (2) rework the account removing all interest, fees, charges, and insurances; (3) if a credit balance results, refund it with Bank of England base rate plus 1% simple interest per year from date of overpayment; (4) remove all adverse information from Mrs J's credit file; or (5) if a balance remains, arrange an affordable repayment plan and remove adverse information once cleared. |
Summary
Mrs J complained that Virgin Money irresponsibly lent her a £4,000 credit card in February 2022. Virgin Money's affordability assessment showed Mrs J had a gross income of £44,000 but existing unsecured debt of £33,386 and insufficient disposable income after essential outgoings. The ombudsman upheld the complaint, finding that while Virgin Money's checks were proportionate, the information obtained clearly demonstrated the lending was unaffordable given Mrs J's high debt-to-income ratio of at least 43.4%. Virgin Money was ordered to rework the account removing all interest and charges, refund any credit balance with interest, and remove adverse credit file information.
The Ombudsman's reasoning
Virgin Money's checks were proportionate in scope, but the information they obtained clearly demonstrated that Mrs J did not have sufficient disposable income to afford sustainable repayments on the credit card after all essential outgoings were considered. With a debt-to-income ratio of at least 43.4% and minimal remaining disposable income, the lending decision was not fair. The ombudsman rejected Virgin Money's argument about subsequent balance transfers, as these were not known at the time of application and could not have informed the lending decision.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Clydesdale Bank Plc trading as Virgin Money, all decisions | 82 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website