Clydesdale Bank trading as Virgin Money · DRN-6167274

The complaint Mr U is unhappy with Clydesdale Bank trading as Virgin Money. Mr U had an ISA with Virgin Money. He regularly deposited money into the account until he was notified he had reached his tax limit for the year. When Mr U contacted the bank he was told he should never have put in the money as he had passed the date for further investment. Virgin Money took the money out of the ISA and returned some of it to the previous ISA and some to an account paying no interest. What happened Mr U spoke to Virgin Money on many occasions throughout the process. This was about transferring funds between accounts, the issues he encountered when trying to get things done, and the problems he found out about when he was told the extra money shouldn’t have ever been paid into the ISA. Mr U said he had asked about this in branch prior to moving the money. He said it was only after he had arranged the transfer for himself he was told that he should have got Virgin Money to do it. Mr U said he was never made aware of this in advance. Virgin Money said this was why it thought he had reached his maximum amount to input. It said it wasn’t aware that some of the money transferred was from a previous ISA. It said if it had done the transfer itself it would have been aware and the account would have been set up differently. Virgin Money apologised for the information Mr U received in branch and said it would provide feedback to the branch. Regarding the fixed rate ISA the funds were transferred into it and Virgin Money said the closing date to fund this account was 31 August 2024. It said the details of this were available online. It confirmed any payments made after this time couldn’t be accepted and the payments had been returned to Mr U. Virgin Money offered £100 compensation for any distress and inconvenience caused. Mr U didn’t accept this and brought his complaint to this service. Our investigator upheld the complaint. In the end she said Virgin Money should increase the compensation a further £100 to make a total payment to Mr U of £200. Mr U didn’t accept this and asked for his complaint to be passed to an ombudsman for a final decision. In my recent provisional decision, I said: “Virgin Money stuck to its terms and conditions point about the final date funds could be accepted into Mr U’s account.

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I’ve listened to the many calls Mr U made in his attempts to get to the bottom of the problem and resolve the matter. I don’t think he’s been treated fairly and reasonably. Mr U made a point about Virgin Money applying a penalty charge to the ISA account when it took the money out and returned it to Mr U. It appeared Mr U made the call that alerted Virgin Money to the funds being incorrectly paid into the ISA account. Up until that point Mr U had made more than 20 deposits despite Virgin Money stating the account couldn’t take any more deposits after 31 August 2024. Mr U said this wasn’t his fault or his issue. He said this was down to Virgin Money and was clearly either a system or a software problem at its end. I tend to agree. I can’t understand how Virgin Money could allow so many transactions after the closing date to arise. I note Mr U asked when Virgin were going to notify him about this problem that it hadn’t noticed until he called it. He was told during this call that it would have noted the issue sooner or later. I’m unconvinced by this when Mr U had managed to make 20 plus transactions after the closing date. It seems more likely to me that the account would have reached maturity date before Virgin would have noticed. Virgin Money acted at this point to return the funds to the flexi ISA some of the money had come from and another account that wasn’t paying interest. Even though Mr U asked several questions and the adviser explained some of the details there was no mention of any penalty charge. But it seems due to the action taken here by Virgin Money Mr U also suffered a penalty charge of £250.70 due to the money now being taken back out of this ISA account. I struggle to see how Virgin Money can find that it acted fairly and reasonably on this point alone. It didn’t tell Mr U, it didn’t explain this to Mr U, and it didn’t offer to take any action to rectify or resolve these further charges. Virgin’s approach here appears to be to stick to its terms and conditions and it hadn’t done anything wrong. Virgin Money said as Mr U had been paid interest on the full amount based on the fixed rate ISA it was fair he should pay the penalty. I don’t agree. Mr U made call after call, he made several visits to branch too and at no point did anyone explain to him how to transfer his existing ISA until after he had made the error of doing the transfer himself. It seems clear to me that if Mr U had been made aware he would have followed the correct process. Similarly, Mr U made the point that when he said in branch he’d been able to make payments into the account he was told he should keep going with this as no restriction was in place. I’ve no reason to doubt what Mr U said as throughout his calls to Virgin Money I think he’s been consistent. I don’t think the same can be said from the calls for the staff of Virgin Money and I accept what Mr U said he was told in branch. It’s clear Mr U wanted to make the most of his investments and he missed out due to the poor service he got in branch and on the telephone when I think he was perfectly clear about what he wanted to do throughout. So, I think a fair outcome here would be for Mr U to get back the penalty charge of £250.70. That way he won’t have missed out on any interest and it puts him back in the position he most likely would have been in if he’d been helped correctly in the first place. It is up to Mr U to advise Virgin Money if he would like it to pay this money into his ISA for him or if he would just like it to pay him the money so he can do with it as he wishes.

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I think this has been a stressful event for Mr U and I don’t think he was offered much support by Virgin Money. I think he was given conflicting information throughout but all he was looking to do was resolve the situation. So, I think the further £100 compensation to bring the total to £200 is fair and reasonable in the circumstances of this complaint.” Responses to my provisional decision Mr U responded. I will focus on the central points he made here. He said all he wanted from the start was to be treated fairly. Mr U said Virgin Money acted against the banking code. He said any number of investors could have added funds and not been penalised while their interest added up. He said this was a fact due to his access to other accounts that prove it and he wants Virgin Money to acknowledge this. Mr U said Virgin Money repeatedly tried to hide behind terms and conditions and the wording on its online platform was very different. Virgin Money responded and said: It hadn’t made a mistake when charging the penalty. And it said it didn’t think Mr U would have been able to get the same rate elsewhere. So, Virgin Money feels it was a perceived loss rather than an actual loss. But it did agree to refund the penalty charge and compensation in an attempt to resolve the issue. It asked to for confirmation details of where Mr U would like the payment made to so it could arrange it. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. It’s clear that Mr U is still upset with Virgin Money and he feels mistreated and misled. I can understand that. I appreciate Virgin Money’s response is an attempt to resolve the matter. Based on the evidence sent in response to my provisional decision I see no reason to change it. So, my provisional decision becomes my final decision. Putting things right • Pay back the penalty charge of £250.70 to Mr U. • Pay a further £100 to bring the total compensation to £200. My final decision I uphold this complaint. I require Clydesdale Bank trading as Virgin Money to:

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• Pay back the penalty charge of £250.70 to Mr U. • Pay a further £100 to bring the total compensation to £200. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr U to accept or reject my decision before 20 April 2026. John Quinlan Ombudsman

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