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

Decision detail

Summary

Mr D complained that Virgin Money irresponsibly lent to him by providing two credit cards (Card A in April 2022 with a £4,400 limit increased to £8,000 in May 2025, and Card B in May 2025 with a £12,500 limit) when he had existing debt and could not afford them. Virgin Money conducted credit checks and verified Mr D's declared income of £45,000 (later £66,000) against credit reference agency data, finding no recent payment difficulties. The ombudsman found the checks proportionate for Card A but acknowledged Virgin Money should have requested living cost information before providing Card B and the limit increase. However, the ombudsman concluded that even with such information, Mr D's validated income would have been sufficient to repay the amounts within a reasonable period, so the lending decision would not have changed. The complaint was not upheld.

The Ombudsman's reasoning

For Card A, Virgin Money's checks were proportionate given the early stage of the lending relationship and the declared income of £45,000 supported the £4,400 limit. For Card B and the limit increase, while Virgin Money should have requested information about living costs given the larger amounts involved (£16,900 then £20,500), the ombudsman concluded that even with such information, Mr D's validated income would have been sufficient to repay these amounts within a reasonable period (5-7 years). Virgin Money was not required to review bank statements and could not reasonably be expected to know about Mr D's discretionary spending.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website