Virgin Money ruining my credit and telling lies :(

Saverinho

Hi there,

I am looking for some advice and guidance about trying to proceed with a complaint to the Financial Ombudsman or otherwise find recourse where I feel I have been unfairly treated.

In Feb/Mar 2023 I transferred my bank account from Virgin Money using the switching service to another provider. I selected that I wanted my direct debits to be switched and for the Virgin account to be closed.

Unfortunately it seems that on the date I picked for the switch my Vodafone monthly bill was attempted to be taken from the Virgin account. Now, due to the switch being underway that day but presumably not fully complete there was no balance and so Vodafone could not take the money, albeit the direct debit was quickly switched within hours and they took the payment from my new bank.

I had no idea about the above issue but basically last month I went to apply for a credit card to buy a new laptop and potentially book a holiday. It was at that point I noted I was eligible for barely anything. Usually I have a very strong credit file and I had no outstanding debts to anyone, overpaying our mortgage etc. I looked in to it and I saw that Virgin Money, the account I believed closed, were reporting that I had been in an unarranged overdraft for 11 months!

I rang Virgin and have been in branch, the top and bottom of it is that when that Vodafone payment could not be made due to the switching process having a hiccup they put a £4 charge on my account. Virgin actually told me I had a linked £29 in a VM Saver too. I paid the £4 and closed down account. The lady at the branch was helpful, told me she could see I had received no letters and that she was on my side having reviewed what happened.

I had a paperless account with them but having raised a complaint and having been phoned back they have told me they have sent 52 letters to my address concerning the matter. I got them to give me the dates which are basically one letter a week about the same issue. This is a complete lie! Additionally I have received zero phone calls from them. They have reviewed my complaint and basically say that it is not a banking error so they cannot adjust my credit file, there is nothing they can/will do to help me.

I want to take this forward with the goal of repairing my credit file which as it stands is a mess due to this...the basis being:

-I used the approved switching process and asked for my account to be closed
-Any reasonable person should have seen the failed direct debit was due to the switch taking place that day and the order in which things were moved over.
-The £4 charge was not reasonable given the circumstances
-I was not notified of the £4 charge by letter or by phone...they say their systems say 52 letters were sent but this is honestly a complete lie. The address they were sent to is my family home and although I have moved out, I am there twice a week and any post in carefully stored my my parents and given to me. I suspect with my account being paperless they may have been sent to the online portal which I was not monitoring due to believe the account was closed. I have found a really old e-mail from March 23 in my spam folders suggesting a document may have been sent to an online portal.
-Even  negating the fact that 52 letters were not sent to me...it is reasonable and fair to expect I should have received a phone call. They say their policy only references letters.
-Their reporting over the £4 charge has ruined my credit rating and is causing me a great deal of stress.

Do I have a case to take forward? I believe I do and I feel they should also compensate me for the hassle, stress and inconvenience this is all causing me. IT feels like completely unfair practice that I have been exposed to this having completed the switching process in good faith.

If anyone can share views or advise I would appreciate it.

MorningcoffeeIV

In no particular order -

They're not lying.  They may have made an error, of the system is reporting something that failed to be actioned, but that doesn't make it a lie.

Very few institutions will make phone calls for such matters.  The costs are too high and its unlikely you were paying a premium service on the account.

It seems at least one email was sent re the situation but wasn't checked by you.  It seems likely that there would have been more, so check this.

You may be able to get a good will gesture if you apologise and ask nicely - but it appears that that is unlikely. You could try FoS, but you don't have much of a case.

In the worst event, the missed payment, now resolved, will not have a dramatic impact on you going forward, especially after several months.

BoGoF

In what way has their reporting 'ruined your credit rating'? 

Saverinho

Thanks for your responses. Sorry I should explain that the email I received in my spam folder was either not long before or not long after my switch. The point being I think this is how they used to communicate but I was not using any online access as I was under the impression my account was closed. I don't think the costs of making one phone call are high and in any case that is not my issue? The switch process is supposed to be protective to customers, not penalise them.  

I would have thought banks had a responsibility. If they were chasing £4,000 they would have phoned me. Instead they have seem to have taken no responsibility for reasonable processing concerning an account closure and have left me exposed to poor credit by applying a charge of £4 when they should have been on board with the transfer to the next bank.

My credit rating now means that my eligibility for cards is really poor whereas previously it has been really good.

DullGreyGuy

You appear to be barking up the wrong tree... under the Current Account Switching Guarantee its the new bank that has to refund you any fees charged as a result of the switching not going smoothly. 

As others have said, your expectation that your old bank will spend employees time attempting to telephone you over a £4 fee is unrealistic. Generating a letter or email is standard practice and certainly with NW it used to be only the first time you used an unauthorised overdraft that they'd contact you, after that it just shows on your statements/online banking. 

If you escalate your complaint to the ombudsman, after getting a response from your former bank, they'll just ask for evidence the communications were sent as they've stated. They cannot hold the bank liable if RM lost letters or spam folders captured emails etc. 

Really it's one to mark up to experience and know that in the future you should double check everything has gone smoothly rather than just assuming it did and not checking for 11 months. 

Saverinho

It is just absolutely ridiculous that they are saying they have sent over 50 letters when that is simply untrue. The whole situations leaves me perplexed and really frustrated.

prettyandfluffy

I am a Virgin Money customer.  If you opted to be paperless I believe all correspondence is done electronically; you may find all those letters sitting in the app waiting for you.  Assuming you still have access to the app, of course.

Hoenir

Saverinho said:

It is just absolutely ridiculous that they are saying they have sent over 50 letters when that is simply untrue. The whole situations leaves me perplexed and really frustrated.

Next time you switch ensure the account is closed. Then you'll have certainty there's no loose ends. Chalk it up to experience. 

martinbainbridge1975

Hoenir said:

Saverinho said:

It is just absolutely ridiculous that they are saying they have sent over 50 letters when that is simply untrue. The whole situations leaves me perplexed and really frustrated.

Next time you switch ensure the account is closed. Then you'll have certainty there's no loose ends. Chalk it up to experience. 

the op appears to have used the switching service so the account should have been closed as part of that process.

it maybe there is some protection under the guarantees of this service, should be no detriment to the customer

DullGreyGuy

martinbainbridge1975 said:

Hoenir said:

Saverinho said:

It is just absolutely ridiculous that they are saying they have sent over 50 letters when that is simply untrue. The whole situations leaves me perplexed and really frustrated.

Next time you switch ensure the account is closed. Then you'll have certainty there's no loose ends. Chalk it up to experience. 

the op appears to have used the switching service so the account should have been closed as part of that process.

it maybe there is some protection under the guarantees of this service, should be no detriment to the customer

Yes, as already mentioned its the new bank that provides the guarantee but the OP is still chasing their old bank