Clydesdale Bank Plc · DRN-5941374

The complaint Mr D has complained about the way Clydesdale Bank Plc trading as Virgin Money dealt with his request for money back. What happened The circumstances of the complaint are well known to the parties so I won’t go over everything again in detail. But, to summarise, in 2024 Mr D booked accommodation through a company I’ll call “T” for a stay in February 2025. The total cost was around £9,500 and Mr D paid for it over two instalments using his Virgin Money credit card. The booking was for Mr D to host 18 people for a special occasion. The rental cost itself was around £5,870 and the total cost also included: • Pool heating of around £435 • Discount of around £40 • Cleaning fee of around £995 • Accidental Damage Protection of around £210 • Resort fee of around £585 • Tax of around £1,130 • Service fee of around £320 Mr D said upon arrival he found the accommodation was inadequate and not up to the standard expected for the price paid. He said he reported issues to T and its onsite management partner. He said problems included: • Air conditioning not working on the ground floor. • Dangerous hair dryers. • An unstable fence at the rear of the property. • No pool heating for the last two days. • A toilet that wouldn’t flush correctly. • A freezer wasn’t cold enough for 5 out of 7 days. • Various other issues with games consoles, remote controls, televisions and a broken lamp. Mr D requested compensation from T and it ultimately offered around £840 but he thought this was inadequate, so he raised a dispute with Virgin Money. Virgin Money raised a chargeback, but this was defended on the basis T had addressed the issues, the property met the description, and that Mr D utilised the service. Virgin Money didn’t take the chargeback further, and it also didn’t think it needed to compensate Mr D under section 75 of the Consumer Credit Act 1974. Mr D didn’t agree and complained, but Virgin Money didn’t change its position. So he referred his complaint to the Financial Ombudsman to consider. One of our investigators looked into things but didn’t make any recommendations. Mr D didn’t agree. In summary, he said:

-- 1 of 4 --

• The investigator misapplied section 75 and that he could pursue Virgin Money for the full amount of his claim. He said Virgin Money’s original rejection was also based on the incorrect assertion that the service was for 19 individuals and not solely for Mr D. • He said issues with the property weren’t all resolved in a timely way. • There was a misinterpretation of contractual terms. • The outcome wasn’t fair and the compensation offered was inadequate. As things weren’t resolved, the complaint has been passed to me to decide. 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. I want to acknowledge I’ve summarised the events of the complaint. I don’t intend any discourtesy by this – it just reflects the informal nature of our service. I’m required to decide matters quickly and with minimum formality. But I want to assure Mr D and Virgin Money that I’ve reviewed everything on file. And if I don’t comment on something, it’s not because I haven’t considered it. It’s because I’ve concentrated on what I think are the key issues. Our powers allow me to do this. I also want to say I’m very sorry to hear Mr D felt let down with the accommodation. I appreciate it cost a significant sum and was for a special event. I can’t imagine how he must have felt, but I thank him for taking the time to bring the complaint. What I need to consider is whether Virgin Money – as a provider of financial services – has acted fairly and reasonably in the way it handled Mr D’s request for getting money back. It’s important to note Virgin Money isn’t the supplier. I’ve gone on to think about the specific card protections that are available. In situations like this, Virgin Money can consider assessing a claim under section 75 or raising a chargeback. Section 75 is a statutory protection that enables Mr D to make a like claim against Virgin Money for breach of contract or misrepresentation by a supplier paid by credit card in respect of an agreement it had with him for the provision of goods or services. But there are certain conditions that need to be met for section 75 to apply. The value of the transaction falls within the financial limits. There also needs to be a debtor-creditor-supplier agreement in place. Having multiple parties involved such as the accommodation owner and other guests can impact the arrangement. But I think in this case Mr D is the debtor and T is the supplier. I think Mr D contracted on behalf of the party, and it’s not clear that he can’t claim on behalf of the group. There are implied terms into services contracts that services need to be provided with reasonable skill and care. And if a service isn’t performed with reasonable skill and care a consumer is able to request repeat performance or a price reduction. Or they can seek other remedies such as damages and so on. For Mr D he’s seeking a 100% price reduction or compensation for the full sum he’d paid, whereas T offered him around £840. Mr D provided evidence of his attempts to try to resolve things with T. And I can see T acknowledged some of the things Mr D said went wrong. So I can understand why Mr D sought compensation given there were elements of the service that he wasn’t happy with or that could be argued weren’t provided with reasonable skill and care. The difficulty I have is that there’s not an exact science or standard formula I can use to say what Virgin Money should have considered to be a fair price reduction in the circumstances. This isn’t a situation where Mr D only stayed for a portion of the expected period because

-- 2 of 4 --

services were poor and the supplier couldn’t resolve things. I think a 100% price reduction would lead to unjust enrichment because Mr D and his party ultimately used the service. I think it’s also relevant that over £3,500 of the cost went to the items in the list I set out in the background of this decision. So not everything Mr D paid was for the rental cost, elements of which he was unhappy with. Mr D thinks the refund offered of under 10% of the total cost paid was unfair. The refund was around 15% of the rental cost itself. Overall, while I know Mr D doesn’t agree, I don’t think Virgin Money was unfair not to agree to refund Mr D everything he’d paid for the stay. Mr D utilised the stay in its entirety. While there were some things wrong with the property, T tried to resolve things for him; some of the problems weren’t noticed until the end of the holiday; some of the issues Mr D accepted; aside from the emails I’ve not seen a lot of supporting evidence of the nature or extent of the problems; and there were many aspects of the accommodation that weren’t complained about. I think the main issue Mr D said wasn’t resolved was in relation to the air conditioning in some of the property. Fortunately, the stay wasn’t in the height of summer, but I can imagine if the party wasn’t comfortable with the temperature any air conditioning issue would have impacted the overall enjoyment. It seems like there was a setting on the pool that needed to be changed which reheated it. I accept there’d have been an impact to the holiday if the pool wasn’t usable for a period, but the refund offered does cover the portion of the pool heating cost for the time Mr D said it wasn’t heated. It’s unusual that there were so many issues with hairdryers. I can see T did arrange for replacements, but Mr D said they weren’t all working properly either. I appreciate this would’ve been concerning. Mr D seems to accept there might’ve been issues with how the toilets were being flushed. And given the issue with the fence wasn’t noticed until the end of the holiday I don’t think it’s caused a significant impact or loss of enjoyment throughout the trip. I can see there was an issue with a freezer in the property, and Mr D said he “just tried to put most things into the one freezer”, so it’s not clear if there was more than one freezer to use but I can appreciate it would’ve been inconvenient if the freezer wasn’t keeping everything as cold as it needed to be. Mr D did complain about a few other less significant issues, some of which he accepted but wanted to highlight so T could look to remedy for the next guests, or in order to make sure T knew they were present when he arrived. I’m not going to set out each issue faced. But I think T did try to support throughout by sending maintenance staff over. Having considered everything carefully I think Virgin Money would have been fair to find Mr D didn’t receive zero value for what he paid for. So even though I agree Virgin Money is jointly liable for the like claim Mr D had against T and that it could have better acknowledged the issues faced, I think it would have broadly acted fairly by deciding the offer on the table from T was reasonable in all the circumstances, and that because any perceived breach of contract was remedied fairly by T’s offer, there weren’t grounds for it to have to do more. T said in its response to Virgin Money the offer is still available.

-- 3 of 4 --

With regards to chargeback, that process provides a way for a card issuer to ask for a payment to be refunded in certain circumstances. The chargeback process is subject to rules made by the relevant card scheme. It’s not a guaranteed way of getting money back. While it’s good practice for a card issuer to attempt to chargeback where certain conditions are met and there’s some prospect of success, there are grounds or dispute conditions set by the relevant card scheme that need to be considered. If these are not met, a chargeback is unlikely to succeed. And something going wrong with a merchant won’t always lead to a successful claim. Virgin Money raised the chargeback for Mr D which I think was fair of it. For defective services, or services not as described, I think it’s relevant that Mr D utilised the service, T tried to assist him where needed, and it offered to issue a part refund. While the card scheme isn’t definitive in the rules, I think T validly defended on the basis the service was utilised, and that even if there were elements defective or not as described it had offered to try to resolve things for Mr D quickly, and that it also offered a partial refund. I think the defence seemed valid, and I therefore don’t think Virgin Money was unfair to not to pursue the chargebacks further. Overall, while I know Mr D was unhappy, I think Virgin Money broadly handled the claim fairly. I’m not going to direct it to take further action. My final decision My final decision is that I think Clydesdale Bank Plc trading as Virgin Money dealt with the claim fairly. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr D to accept or reject my decision before 22 April 2026. Simon Wingfield Ombudsman

-- 4 of 4 --