Partially upheld: irresponsible lending complaint against Monzo Bank Limited
Financial Ombudsman decision DRN-5965512 of 2026-06-09T00:00:00+00:00. irresponsible lending complaint against Monzo Bank Limited. Outcome: Partially upheld.
Decision detail
| Reference | DRN-5965512 |
|---|---|
| Decision date | 2026-06-09T00:00:00+00:00 |
| Firm | Monzo Bank Limited |
| Product | Overdraft |
| Claim type | irresponsible lending |
| Outcome | Partially upheld |
| Remedy | Monzo Bank Limited to pay Mr T £300 compensation. (Note: Monzo had already agreed to refund overdraft interest from 25 July 2019 to 24 October 2024 plus 8% interest and to contact Credit Reference Agencies to rectify information.) |
Summary
Mr T complained to Monzo Bank Limited about irresponsible lending across an overdraft, five personal loans, and a Flex account. Monzo accepted that the 2019 overdraft limit was unaffordable and agreed to refund interest, but maintained that all subsequent lending decisions were affordable based on Monthly Affordability Capacity calculations and verified income information. The Ombudsman upheld the complaint in part, finding the 2019 overdraft was indeed unaffordable but that subsequent lending decisions were supported by reasonable and proportionate affordability checks. The Ombudsman awarded £300 compensation for the impact of the overdraft miscalculation and effect on Mr T's credit file, but did not require refunds or write-offs for the loans or Flex account.
The Ombudsman's reasoning
The Ombudsman found that while the 2019 overdraft limit was unaffordable, the subsequent overdraft limits, five personal loans, and Flex account limits were supported by reasonable and proportionate affordability checks. Monzo verified Mr T's income and debt obligations through credit reference agencies and calculated affordability based on the value and duration of each product. The checks were appropriate for the amounts being lent, and there was no evidence the repayments would be unsustainable. The £300 compensation was deemed reasonable to address the impact of the overdraft miscalculation and effect on the credit file.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Monzo Bank Limited, all decisions | 147 | 10% |
| Overdraft, all decisions | 3,791 | 24% |
Source
Read the original decision on the Financial Ombudsman Service website