Not upheld: irresponsible lending and unfair treatment complaint against Monzo Bank Limited

Decision detail

Summary

Miss C complained that Monzo irresponsibly provided her with an overdraft facility and subsequent increases that she could not afford. Monzo initially granted a £50 overdraft based on Miss C's declared income of £10,000 annually, living situation with parents (no rent), and estimated disposable income of £212 monthly after essential costs and existing commitments. The overdraft was incrementally increased to £1,000 by May 2025. The ombudsman found that Monzo conducted proportionate checks, the account was managed responsibly with short-term borrowing patterns, Miss C frequently returned to credit balance, and there was no evidence of financial difficulty or adverse credit information. The complaint was not upheld, and the ombudsman noted Monzo had already provided compensation for separate complaint handling issues.

The Ombudsman's reasoning

The ombudsman found that Monzo's initial checks were proportionate given the small initial overdraft of £50 and Miss C's apparent financial position. The account usage pattern showed responsible short-term borrowing rather than over-reliance, with Miss C frequently returning to credit balance. Although Miss C used the overdraft, there was no evidence of financial difficulty, repeat over-reliance, or adverse credit information that would have triggered heightened monitoring or intervention. The incremental increases were supported by continued affordability based on income and expenditure.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website