Upheld: account restriction, fund access delay, and administrative error in compensation payment complaint against Monzo Bank Limited
Financial Ombudsman decision DRN-5977676 of 2026-05-29T00:00:00+00:00. account restriction, fund access delay, and administrative error in compensation payment complaint against Monzo Bank Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-5977676 |
|---|---|
| Decision date | 2026-05-29T00:00:00+00:00 |
| Firm | Monzo Bank Limited |
| Product | Other regulated product |
| Claim type | account restriction, fund access delay, and administrative error in compensation payment |
| Outcome | Upheld |
| Remedy | Monzo must pay S £100 compensation for inconvenience caused by the account restriction and the error in paying the original compensation to a closed account. |
Summary
S complained that Monzo restricted funds received into its business account despite providing advance notice, causing a one-day delay. Although S had previously provided documentation for an earlier restricted payment, Monzo requested further verification. Monzo upheld the complaint, acknowledging the review took too long and it erred by paying £50 compensation to S's then-closed account. The ombudsman found the restriction was fair under Monzo's terms and regulatory obligations, but upheld the complaint due to the delay in review and payment error, ordering £100 compensation.
The Ombudsman's reasoning
Monzo has legal and regulatory obligations to monitor accounts and request information regarding payments. The ombudsman found Monzo fairly relied on its terms and conditions to restrict the account and request documentation. Financial institutions are entitled to set their own risk criteria and are not obligated to automatically accept further payments simply because advance notice was provided or previous documentation was satisfactory. However, Monzo acknowledged it took too long to complete the review and made an error in paying compensation to a closed account. The one-day restriction and these errors warrant compensation.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Monzo Bank Limited, all decisions | 149 | 10% |
| Other regulated product, all decisions | 52,408 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website