Bank of Queensland has bought Virgin Money with the expectation it will provide an effective national online distribution channel after it has had mixed results itself trying to expand outside its home state. There is a widespread view that Virgin Money is a strong brand that attracts a desirable demographic, but how strong can it be when it has struggled to maintain a consistent business model or make a profit over its 10-year history in Australia?Bank of Queensland's chief executive, Stuart Grimshaw, is making a A$40 million investment in a business that lost $4.6 million in 2009/10, $5.3 million in 2010/11 and $9.2 million in 2011/12.The deal, announced yesterday, allows BOQ to use the Virgin Money brand for up to 40 years in return for an annual royalty. The $40 million acquisition cost includes $30 million of BOQ shares.Virgin Money's losses can be explained by the fact that it has been investing in the rebuilding of its business, after its original credit card and mortgage providers pulled out of their partnerships.But that rebuilding has been going on since 2009 and is yet to bear fruit. The investment spend will continue; one interesting revelation yesterday was that Virgin Money has no mobile capability.Despite this, BOQ said yesterday that the acquisition would enhance its earnings per share (be EPS accretive) in the second full year of ownership.In May 2003, Virgin Money kicked off in Australia when Westpac provided a white label service for the original Virgin Money credit card. It attracted 500,000 card holders, but Westpac dissolved the partnership in 2007.Westpac was understood to have been unhappy with the terms of the deal. The card had no fees, a low interest rate and a very modest rewards program. Average spend was low and Westpac didn't make much money.Then in 2006, Macquarie Bank partnered with Virgin Money to launch a home loan. But by May 2008 Macquarie's funding strategy had been disrupted by the financial crisis and it stopped writing new loans. From then until the business was re-launched late in 2009 the only active product in Virgin Money's portfolio was a superannuation fund.Since then, Virgin Money has launched a suite of credit cards, these in partnership with Citibank; a car insurance product; life insurance; and a savings account.The brand is commonly associated with credit cards, but its 2011/12 accounts show that it makes most of its money from its investment products - superannuation and savings accounts. The accounts also show that its area of strongest growth is insurance.One of the strength's claimed for Virgin Money is its high rate of customer acquisition over the past couple of years. According to BOQ, Virgin Money has 150,000 customers. One independent source able to verify this number, Roy Morgan Research, said that in consumer surveys last year 92,000 people identified themselves as Virgin Money customers.There is always a difference between the number of customers a financial institution has on its books and the number who are active.Virgin Money Australia has always had more hype than