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

Decision detail

Summary

Mrs B complained that Virgin Money irresponsibly provided her with a credit card in July 2019 with a £3,700 limit, causing her ongoing difficulty. Virgin Money declined the complaint, and Mrs B referred it to the FOS in October 2025. The ombudsman assessed the complaint under section 140A of the Consumer Credit Act 1974 as relating to an unfair lending relationship. Virgin Money had verified Mrs B's income of £30,000 per annum through credit reference agencies and found no recent payment difficulties. Mrs B immediately used the card's 0% balance transfer offer to consolidate existing credit card debt, improving her financial position. The ombudsman found Virgin Money's checks were reasonable and proportionate, and that the lending was not irresponsible or unaffordable, therefore not upholding the complaint.

The Ombudsman's reasoning

The ombudsman applied section 140A of the Consumer Credit Act 1974 to assess whether the lending relationship was unfair. Virgin Money's checks were reasonable for the early stage of a lending relationship. Mrs B's income of £30,000 was sufficient to support the £3,700 revolving credit facility, particularly as she immediately used the 0% balance transfer offer to consolidate existing debt at a lower interest rate, improving her financial position. The ombudsman found no evidence that further checks would have revealed the credit card to be unaffordable, and Virgin Money had no reason to believe Mrs B's indebtedness would increase given the balance transfer opportunity.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website