Monzo wrongly denied refunds to 1000’s of fraud and rip-off victims | Monzo financial institution

[ad_1] Monzo has wrongly denied refunds to 1000's of fraud and rip-off victims, the Guardian can reveal.

The digital-only financial institution wrongly rejected greater than 1,000 fraud and rip-off complaints that had been closed final 12 months alone, in line with knowledge from the Monetary Ombudsman Service (FOS).

Fraud and rip-off complaints can come from victims of authorised push fee (APP) scams, in addition to chip and pin fraud and id theft.

Final 12 months Monzo was deemed to have made the fallacious name in 34% of three,372 circumstances referred to the FOS. That was the very best price among the many British banks receiving essentially the most complaints.

NatWest ranked second, deemed to have wrongly rejected 33% of 1,972 fraud complaints, and HSBC third, with 32% of two,535 complaints wrongly rejected.

There's usually a lag between fraud occurring, the shopper elevating a criticism to the financial institution, and the FOS later processing escalated complaints. A spokesperson for Monzo stated a number of the circumstances associated to fraud that had occurred greater than two years in the past.

They stated: “Since then, we have now continued to put money into expertise to cease fraud earlier than it impacts our prospects – and it’s working. We prevented 2.9 occasions the worth of fraud in 2025 in comparison with the 12 months earlier than.”

Fraud has grow to be essentially the most generally skilled crime within the UK, accounting for an estimated 41% of all offences in England and Wales within the 12 months ending September 2024.

Alex Neill, the co-founder and co-chief government of the buyer rights organisation Client Voice, stated fraud and rip-off victims typically confronted additional misery when making a criticism in opposition to their financial institution.

“Individuals who’ve been scammed aren’t simply out of pocket, they're typically left feeling fearful and ashamed,” she stated. “Corporations have to play their half and make reimbursement honest, quick and constant, with out forcing victims into an extended struggle for solutions.”

In 2024 the federal government launched a brand new rule that obliges banks to refund most victims of APP fraud tricked and manipulated into transferring cash to the criminals.

UK Finance, a physique that represents the banking business, discovered there have been 185,733 APP circumstances in 2024, down 20% from a peak of 232,427 in 2023. Total, fraudsters took £450.7m from their victims in 2024, and £267.1m was paid out in compensation.

A spokesperson for the FOS stated it acquired a whole lot of circumstances every week from individuals who have been victims of fraud and scams.

Monzo, which is online-only, launched in 2015 as a wave of challenger banks akin to Revolut and Starling joined the sector. It was valued at £4.5bn in October 2024 when workers offered inventory to present buyers.

Whereas its valuation has lagged considerably behind that of Revolut, Monzo has targeted most of its development within the UK and gained a banking licence from British regulators in 2016.

Nevertheless, final summer time the financial institution was fined £21m by the Metropolis regulator over weak monetary crime controls, after it allowed prospects to register for accounts with “implausible” dwelling addresses – together with 10 Downing Avenue, Buckingham Palace and Monzo’s personal headquarters.

A couple of months later Monzo made the shock announcement that its chief government, TS Anil, who has led the corporate for nearly six years, would step down in February. He will probably be changed by Diana Layfield, a former Google government.

Below Anil’s management, Monzo trebled its variety of prospects to greater than 14 million. The financial institution reported a document £60.5m in pre-tax revenue within the 12 months to March, with income of £1.2bn.

A FOS spokesperson stated if somebody had been a sufferer of a rip-off, they need to first communicate to their monetary supplier. “In the event that they don’t really feel they’ve been handled pretty by their financial institution, they need to complain to the enterprise first, then get in touch with our free and impartial service and we’ll see if we will help,” they stated.

A spokesperson for NatWest stated its precedence was to resolve complaints for patrons within the first occasion, and it proactively reached out to prospects in historic circumstances to assist the FOS clear its backlog of complaints and labored intently with the ombudsman to make sure honest outcomes for its prospects.

A spokesperson for HSBC stated: “We absolutely adjust to our regulatory obligations across the necessary reimbursement of scams. Final 12 months, we refunded over 13,000 rip-off claims and prevented over £130m being defrauded from our prospects.

“Monetary Ombudsman Service knowledge displays solely the small proportion of circumstances that had been referred to the ombudsman and doesn't seize the purchasers we efficiently assist annually by means of early intervention, reimbursement, and assist.”

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