Virgin Money Letting US Business Fade Away
The spartan home page on Virgin Money’s web site reads: “Everyone’s better off with simplicity in a complex world”. This is apparently the strategy Virgin Money is pursuing with their American business, as they seem to have dropped their loan servicing, student loan, direct mortgage, and mortgage licensing products from the site entirely.
The only option left for users is Virgin’s most basic social lending product, Handshake Basic, where for the low low price of $99 Virgin Money will pump out a templated promissory note for you and your kindly friend/lender (never mind that promissory note templates are readily available for free online). No longer available is the Handshake Plus product, where Virgin would at least collect payments on the lender’s behalf, avoiding those awkward “hey, could you, uh, pay me back?” moments.
This is the sad winding down of yet another of Richard Branson’s grand visions. From the acquisition of CircleLending in May 2007 and the opulent, history-bending (a British guy preaching revolution in Boston?) launch in Boston’s Copley Square in October 2007 (see video), it’s taken about two years for the Virgin Money empire to collapse in the United States.
The first clue that something was awry at Virgin Money was the awkward resignation of CircleLending’s founder Asheesh Advani. Our post on Advani’s resignation has drawn a lot of comments, including accusations of sexism, racism, and general incompetence. Either Advani’s ouster was an attempt to reinvigorate the company, or just another step towards the grave. In either case, later comments alleged a few more details about the demise of the company:
- The company was no longer offering retail mortgages or reselling its mortgage license. The general manager of the mortgage business had bought Virgin Money’s licenses and started ClearPoint Funding. (ClearPoint’s state licenses page lists Virgin Money’s same licenses in fewer states, but the same pithy headline: “Drivers, dogs, yes, even we need licenses too. Here they are.”)
- Virgin Money has eliminated loan servicing, and transferred loan servicing for previously-issued loans to a third party loan servicer.
- Virgin Money recently laid off 80% of their staff and removed the sign from their “posh” office space (although the view from Google Maps is very mid-80s office park).
All but the last point can be verified, but from the, uh, simplicity of the Virgin Money US site, it’s pretty clear that the friend-to-friend lending experiment that started back in 2001 is coming to a close.
Photo credit: Richard Branson in Fortune Small Business