Partially upheld: irresponsible lending, credit file reporting accuracy, debt write-off request complaint against Clydesdale Bank Plc trading as Virgin Money
Financial Ombudsman decision DRN-6285438 of 2026-04-17T00:00:00+00:00. irresponsible lending, credit file reporting accuracy, debt write-off request complaint against Clydesdale Bank Plc trading as Virgin Money. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6285438 |
|---|---|
| Decision date | 2026-04-17T00:00:00+00:00 |
| Firm | Clydesdale Bank Plc trading as Virgin Money |
| Product | credit card |
| Claim type | irresponsible lending, credit file reporting accuracy, debt write-off request |
| Outcome | Partially upheld |
| Remedy | Virgin Money must: (1) Pay £250 compensation (£50 already offered plus £200 for trouble and upset); (2) Rework the account to remove all interest, fees, charges and insurances not already refunded; (3) If rework results in credit balance, pay to Mrs H with 8% simple interest per year from date of overpayment; (4) If outstanding balance remains, arrange affordable payment plan; (5) Once balance cleared, remove adverse information from credit file. |
Summary
Mrs H complained that Virgin Money failed to report her credit card account correctly to CRAs and refused to write off her debt. The investigator upheld the irresponsible lending complaint, which Virgin Money accepted, but Mrs H sought debt write-off rather than the recommended compensation. The ombudsman partially upheld the complaint, finding the lending was unaffordable and ordering removal of interest and charges plus £250 compensation, but rejected the debt write-off request as Mrs H's circumstances showed potential for future financial improvement and regulations do not mandate debt write-off. The credit file reporting was found to be accurate based on Virgin Money's evidence.
The Ombudsman's reasoning
The ombudsman found Virgin Money acted unfairly in approving the unaffordable credit card but determined that debt write-off is not mandated by FCA rules and should only occur in extreme circumstances where financial improvement is unlikely. Mrs H's circumstances showed potential for improvement through future employment or property options, so write-off was not warranted. The credit file reporting was found to be accurate based on Virgin Money's evidence, with discrepancies likely arising from third-party sources or the CRAs themselves. The ombudsman applied the FOS's longstanding approach that lenders should not have capital balances written off as borrowers have had use of the money.
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