Not upheld: Card / payment disputes complaint against Monzo Bank Ltd

Decision detail

Summary

Mr Y complained that Monzo mishandled his request for a refund under the Direct Debit Guarantee scheme after a £419.19 direct debit to UW was taken on 31 October 2025, despite him having reached a separate payment agreement with UW for a lower amount on 30 October 2025. Mr Y had cancelled the direct debit in the Monzo app on 30 October but the cancellation was less than the required two working days notice. Monzo initially refused to raise an indemnity claim without evidence of an error, and the refund was only obtained on 4 November 2025 after UW contacted Monzo confirming the separate arrangements. The ombudsman found that Monzo acted reasonably as there was no apparent error covered by the DDG - the mandate remained active, the amount and date were correct under the original agreement, and Mr Y's cancellation notice was insufficient. While acknowledging that Monzo's communication could have been clearer, the ombudsman did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that the Direct Debit Guarantee scheme does not provide an automatic right to immediate refund in all circumstances - it only applies where an error has been made in the payment. Since the direct debit mandate remained active on Monzo's system, the amount and date were correct under the original agreement, and Mr Y's cancellation notice was insufficient (less than two working days required), there was no apparent error covered by the DDG. Monzo was therefore reasonable in asking for evidence of an error before processing an indemnity claim. The ombudsman acknowledged that Monzo's communication could have been clearer and more consistent, but found this was not sufficient to uphold the complaint given that the refund was ultimately obtained promptly once the merchant confirmed the separate arrangements.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website