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

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 remortgaging.

The Virgin One account – which was initially launched in 1997 – offered several financial products, including a mortgage and current account, bundled into one account.

Those who had the account were issued with a repayment plan guide, which explained how much should be left in the account each month in order for the mortgage to be paid off by the end of the term.

But some Virgin One customers were contacted between 2012 and 2014 to let them know they were behind on the plan. As a result, some took evasive action such as selling their house.

Royal Bank of Scotland (RBS), which now manages the accounts, says that customer feedback along with an internal review shows that this contact could have led homeowners to take unintended actions, including remortgaging or moving home. It's writing to customers to offer them refunds for losses associated with this.

It is thought that hundreds of customers will be written to and some could get £1,000s back.

See our Mortgage Best Buys to find yourself the best deal on your mortgage.

'We found the monthly statements contradicted themselves'

Donna, who didn't wish to give her second name, is one of the ex-Virgin One customers who is being refunded £7,000 after receiving the letter below.

She was contacted between 2012 and 2014 to tell her that she was behind on her repayment plan and later sold her house. She has now received an apology and been offered over £5,000 for the costs associated with the sale, plus extra money due to interest.

Donna said: "We found the monthly statements with Virgin One contradicted themselves and were quite confusing. It would often tell you that if you carried paying into the account at the rate you were doing so you would be left with an outstanding amount on your mortgage on closure, but then on another page it would state that you had XXX amount of money to borrow.

"It soon became clear that it was too flexible and once the yearly statement came in with the forecast and the threat we could lose our home, we decided to remortgage with another provider and opt for a straightforward repayment mortgage. We sold in 2014."

How do I find out if I'm owed?

RBS says it will contact any customers who it finds have been affected by the issue, so you shouldn't need to do anything.

It says it is still working through affected customers, so not everybody will have been contacted yet.

If you think you may have been affected, however, you can call RBS on 0800 678 1923. If you're unhappy with how you've been dealt with, you can make a complaint on the RBS website. Then, if it won't help you, or you have waited eight weeks and still haven't heard back, you can then go to the ombudsman.

To start your complaint, fill in a form at the Financial Ombudsman Service website or call 0800 0234 567.

What does RBS say?

An RBS spokesperson said: "As a responsible lender we contacted customers to make sure they had plans in place to pay down their mortgage when it came to the end of the term. We offered help and advice with payment plans and prepared our customers for reaching the end of their mortgage term.

"We understand this communication could have been misinterpreted as a request for immediate payment and are therefore proactively contacting customers and offering compensation where appropriate."

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