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

Decision detail

Summary

Miss A complained that Virgin Money irresponsibly lent to her by approving a credit card with a £3,900 limit in July 2021 and increasing it to £7,800 in June 2022 and £8,900 in February 2024. She argued the checks were not proportionate, particularly when her credit limit doubled while she was already utilising a high amount of credit. The ombudsman found that Virgin Money's checks were proportionate at each stage because Miss A's unsecured debt was falling, she had no late payments or overlimit fees, and she regularly made repayments substantially above the minimum, demonstrating disposable income and responsible credit management. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Virgin Money's checks were proportionate at each stage because: (1) at initial approval, there was no adverse credit information and the affordability assessment supported the £3,900 limit; (2) at the June 2022 increase, Miss A's unsecured debt had fallen, she had made no late payments, and she demonstrated capacity to make repayments substantially above the minimum; and (3) at the February 2024 increase, unsecured debt had nearly halved, credit utilisation was falling, and Miss A continued to demonstrate responsible repayment behaviour. The ombudsman rejected the argument that checks were insufficient when the credit limit doubled, noting that the overall pattern of debt reduction and repayment behaviour supported the lending decisions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website