Not upheld: alleged overcharging on mortgage (arrears fees and legal charges) complaint against Clydesdale Bank Plc trading as Virgin Money

Decision detail

Summary

Mr and Mrs W complained that Virgin Money overcharged them on their interest-only mortgage, requesting a full audit of the account. Virgin Money asked for more specific information rather than providing the audit. The ombudsman found that complaints about charges before January 2019 were outside the time limits, as annual statements provided sufficient information for the customers to be aware of charges at the time. For charges applied since 2019 (arrears fees and legal charges), the ombudsman found they were properly applied in accordance with the mortgage terms and conditions and clearly communicated. The ombudsman noted that a previous FOS decision had already determined Virgin Money was not unfair in taking repossession action, making it fair to pass those costs to the customer. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied strict time limits to the complaint, finding that charges before January 2019 were outside the six-year and three-year time limits. For charges within the time limit (2019 onwards), the ombudsman found they were applied in accordance with the mortgage terms and conditions and were clearly communicated. The ombudsman noted that arrears fees and legal charges were reasonable given the mortgage was in arrears and legal action was necessary. Previous FOS decisions had already determined Virgin Money was not unfair in taking repossession action, so passing those costs to the customer was also fair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website