Hundreds of ex-Virgin One mortgage customers to get refunds - with some getting £1,000s back - MSE

Some ex-Virgin One mortgage customers are being refunded after a review found the information they were sent about the account could have been misinterpreted and may have led to them making decisions that could have cost them money - such as moving home or re-mortgaging...
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'Hundreds of ex-Virgin One mortgage customers to get refunds - with some getting £1,000s back'
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  • One-EyeOne-Eye Forumite
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    Don't forget that you could reclaim the tax deducted on the compensatory interest from HMRC - just as thousands have done with PPI payouts. I'm surprised this isn't mentioned in Callum's article.
  • PaulShPaulSh Forumite
    21 Posts
    Having received these "you are behind plan" letters myself, I can't really see what was wrong with them. The Virgin One Account was totally flexible, that was the whole point. Yes, everyone had a repayment plan, but Virgin (and later RBS, who bought it) didn't absolutely insist that you kept to it at all times - if they had done then how would it have been any different from a standard mortgage? Of course they had to believe that you would somehow repay the balance by the target end date, but when I had a One Account I took it down to zero and then back up to the limit again before I finally paid it off. It was nothing less than a total financial lifesaver for me.

    And as for the statements contradicting themselves, this is somewhat of an exaggeration. They say how far ahead or behind plan you are, then they say how much remains of your mortgage facility. So you might have, say, a facility of £100,000 and a balance of £40,000. No matter how far ahead or behind plan (within reason) you are, it will say that you can borrow another £60,000, which is true. I even phoned them up one day to double-check this. The bottom line is don't get a financial product you don't understand.

    The only thing really wrong with the One Account was that it was sold initially as a tracker, but after a while the interest rate stopped tracking the bank rate, and ended up on the high side. However, because the interest rate depended on your loan-to-value ratio, you could have your house revalued from time to time and that would generally get the rate cut.
  • emmaecclesemmaeccles Forumite
    4 Posts
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    No mention of the unilateral imposition of a reduced facility in this article.....
  • PaulSH is right when saying that the Virgin One Account was fully flexible and that Virgin didn't insist you kept to the plan - that was the USP of the One Account, you didn't need to clear it until the final day. The One Account was an excellent, innovative product which worked brilliantly for those that understood it and could use it to its full advantage (sounds like PaulSH did, well played sir). It falls completely flat on its face when RBS don't understand the product and treat their customers with disdain and disrespect.

    In 2013 I was called by RBS who insisted I was behind plan and had to pay £9000 into the account within 6 weeks to put me back on plan or else they would commence proceedings to recover it, they threatened to take our home! When i objected I was told that it was 'in the small print'. Now that is not the basis on which this account was sold, I should know, I worked for Virgin One Account and, to my shame, still work for RBS.

    We had a dreadful few days in which my wife came close to a complete breakdown and I almost resigned from my job. It was only the threat of an RBS employee (with an RBS mortgage, who had lost all his savings due to the RBS share collapse, and going to be made homeless by RBS) going to the media at the time that seemed to make them listen and it was agreed my mortgage term could be extended so that the 'plan' line moved and I was then considered to be 'on plan.' We agreed to this to avoid any short term impact and then switched to another provider at the earliest opportunity.

    We are now in the process of going through their complaint procedure which has been ongoing since August with no end in sight - every four weeks comes a letter to say they are still investigating and will write again within four weeks. And yes, I'm still ashamed to work for RBS because despite their mantra at striving to be number one for customer service, trust and advocacy by 2020, there seems to be little improvement on that score.
  • kingstreetkingstreet Forumite
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    RBS was about as useful with One Account as it was with First Active, another innovative product/lender it purchased.

    https://forums.moneysavingexpert.com/showthread.php?t=2382093
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • I took out a Virgin One mortgage when I was self employed and still have it now. Its a fantastic tool. I've paid the mortgage 'off', then used the facility to buy to let. I've stooged credit cards to keep my interest payments down. Bought cars on it and put saving into it whenever possible. The term is up in a few years and I will really miss it. Best mortgage ever! Can't see why they would need to pay compensation to anyone for it, its fully flexible, and allows you to manage your own finances like a grown-up.
  • You are absolutely right bigbadbaz, it was a fantastic tool and I was happily using it exactly the way you were. The problem arose when RBS didn't understand that we could use it that way. In 2013 I was below the 'plan' line and that's when the trouble started with threatening demands to pay funds into it to bring it back above plan - that was the way it was intended to be used so that you, as a responsible adult, could decide when and how you used the facility right up to the end of the term. As a member of the Virgin team who worked on the product in the late 90s I knew it better than the people who were telling me how I should use it. They wouldn't listen so RBS ended up upsetting and screwing over a lot of people at the time. Some sold their homes or remortgaged with other providers because they couldn't meet the demands for payments of many thousands at short notice to bring them back on plan. They put a lot of people through a lot of torment at the time, they deserve to be hammered for it.
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