Partially upheld: Account administration errors complaint against Clydesdale Bank Plc trading as Virgin Money

Decision detail

Summary

Ms B complained that Virgin Money unfairly allocated her credit card repayments and provided poor customer service. Virgin Money had previously reallocated her payments on request but refused to do so in September 2025, citing contractual terms. Although the payment allocation methodology complied with the credit card agreement, Virgin Money had failed to clearly explain the process initially and created a reasonable expectation of flexibility through prior conduct. Additionally, Virgin Money promised an interest waiver in December 2025 but incorrectly applied a late payment waiver instead, resulting in £46.93 being wrongly charged. The ombudsman upheld the complaint in part, ordering Virgin Money to refund the £46.93 and pay £100 compensation for service failures, while upholding the contractual payment allocation methodology.

The Ombudsman's reasoning

While Virgin Money's payment allocation methodology complied with the contractual terms Ms B had agreed to, the firm created a reasonable expectation through prior conduct of accommodating reallocation requests. Virgin Money failed to clearly explain the contractual process on initial contact and allowed reallocations without properly referring to the terms. Although Ms B ultimately benefited from the first interest waiver, Virgin Money then failed to apply the second promised interest waiver correctly, instead applying a late payment waiver. This compounded the service failures including the case handler's departure and broken callback promises. The refund of the incorrectly charged interest and compensation for distress and inconvenience appropriately remedies these service failures, while the contractual payment allocation methodology itself remains valid.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website