Media Man Australia - The Online Home of Greg Tingle

Virgin in a wallet no seven-day wonder, by Helen Shield - 2nd August 2003
(Credit: The Sydney Morning Herald)

Virgin Money has defended itself against allegations of poor customer service, saying it had overcome a backlog of credit card applications and was now up to date.

Managing director Rohan Gamble rejected claims that Virgin Money had processed less than 10 per cent of an estimated 150,000 applications for the Virgin Credit Card, saying such reports were "massively off the mark".

He declined to say how many credit card applications Virgin had received and how many had been processed.

Sir Richard Branson launched Virgin Money's zero-annual fee, low-rate credit card in Australia in a blaze of publicity in May, but despite the runaway success of Virgin Blue airline and Virgin Mobile, Virgin Money has been plagued by allegations of poor service.

Yesterday Mr Gamble conceded that Virgin Money and its processing partner, Westpac, had been "overwhelmed by the demand" - the partners received 50,000 credit card applications in the first week - but insisted that Virgin was meeting its self-imposed seven-day deadline for approving new Virgin Credit Card applicants.

In recent weeks, Virgin Money has been lambasted for poor customer service by subscribers to consumer website http://www.notgoodenough.com.au, and yesterday banking industry newsletter http://www.thesheet.com reported that Westpac had processed less than 10 per cent of the estimated 150,000 applications for the card.

Mr Gamble said those figures, attributed to a Finance Sector Union source, were wrong, but he declined to correct them for competitive reasons.

"We had 50,000 applications in the first week," he said. "Since then demand has been incredibly strong. It hasn't flown at 50,000 a week, but it has continued to be amazingly strong."

He said Virgin Money was still getting "tens of thousands" of applications a week for the 11.9 per cent credit card - with a special 4.9 per cent rate for the first six months - which compares favourably with average credit card rates of 16 to 18 per cent.

Virgin Money had issued "tens of thousands of cards" and was "absolutely meeting our targets now", he said.

The group has the dubious distinction of a fifth- place ranking in the top 10 most complained about companies on http://www.notgoodenough.com.au

Founder Dr Fiona Stewart said the website had received a "steady stream of gripes" about Virgin Money.

Most of the complaints were about delays - specifically, that Virgin failed to process credit card applications within the seven days promised.

Westpac spokeswoman Julia Quinn said Westpac had "worked hard" to deal with the deluge of applications and is running at its target service levels, "a five-day turnaround".

Mr Gamble said one issue that was frustrating Virgin Money customers was the 100-point identity check, which involves customers proving their identity with a range of documents. This is compulsory for anyone wanting to open a bank account. Aspiring bank customers could complete the 100-point check by bringing documentation into a bank branch, but Virgin Money customers had been asked to send this information by mail.

He said customers might have been confused by "the wording" of Virgin's claim to approve credit card applications within seven days. The seven days related only to Virgin's decision to approve the applicant. After that, customers still needed to undergo the 100-point identity check.

Melbourne man Peter Mitchell, who applied for a Virgin card in May - and withdrew his application in frustration earlier this month - said he thought he had been promised a credit card in his wallet in seven days. He was angry that he had to wait weeks for a response, only to be asked to complete the 100-point check.

"I don't know why they didn't ask for the 100-point check from the start," he said. "I would have been happy to take my application to a Westpac branch and say, here's my ID. I'm disappointed."

Mr Gamble rejected outright another complaint by some notgoodenough subscribers - that Virgin was rejecting customers with good credit records because they had a history of paying off their cards in full each month.

Virgin Money had received 10 such complaints, which it investigated, and said eight of those were "fraud cases".

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