Virgin Money has made a U-turn on the decision to block some of its credit card customers from making new purchases.
The company says that it had decided it was not the right time to make the changes, as a result of feedback it had received. The bank also made an apology for the inconvenience, and worry, caused as a result of its actions.
Last week, it was revealed that some Virgin Money customers had been notified via email that, subsequent to a review of accounts, further spending on their credit cards had been blocked.
These customers were told that their accounts would not be able to make any more purchases with immediate effect, as their accounts had been blocked.
Virgin Money will not divulge how many of their customers were affected by the decision, but it is believed that upto 32,000 customers received notification from the company on Tuesday.
On Friday, Virgin Money decided to go back on its decision following a further review. All the cards affected had their purchase limits lifted, and credit limits were also reinstated to the previous amounts.
Customers did not need to take any action, and the changes automatically went into effect from Saturday morning.
Virgin Money had made its initial decision at a difficult period for many - with most households trying to make ends meet with severely reduced incomes as a result of the coronavirus lockdown.
Lenders have been encouraged by the Financial Conduct Authority (FCA) to help customers by putting forbearance measures into place to aid customers.
Virgin Money initially said that, as is the case with other card providers, they needed to make regular reviews of accounts in order to be responsible lenders.
However, critics argue that cutting credit limits for some customers would leave them vulnerable and unable to make day-to-day living costs - something that Virgin Money should consider.
Virgin Money said that they had put in place a process for customers to request their accounts be reopened, and that several customers had had their cards reactivated.
The group personal banking director at Virgin Money, Fergus Murphy, said: “Having made changes to a number of credit card accounts to reduce the chances of customers getting into unsustainable debt, we recognise that it was not the right time to make these changes.
“We listened and we’ve now reversed the decision. We are sorry for the additional worry and inconvenience this may have caused, particularly at this time”.
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