Not upheld: improper application of default markers and credit file reporting; failure to engage with legal representatives complaint against Monzo Bank Limited

Decision detail

Summary

Mr B complained that Monzo improperly applied default markers to his overdraft and Flex accounts, failed to engage with his legal representatives, and should remove the defaults from his credit file now that the debt is paid. Monzo had sent payment reminders and default notices before applying the defaults, and the overdraft default was registered on 22 July 2024, before solicitors contacted Monzo on 23 July 2024. The ombudsman found that Monzo provided fair warning, Mr B failed to engage in reaching a payment arrangement, and the defaults were properly applied. The ombudsman also found that reporting defaults as 'satisfied' once paid in full is accurate and fair reporting in accordance with industry guidelines, and therefore declined to uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that Monzo provided sufficient and fair warning of default through payment reminders and default notices before applying the defaults. The overdraft default was applied on 22 July 2024, before the solicitors contacted Monzo on 23 July 2024, so the delay in responding to solicitors could not have caused the overdraft default. Mr B failed to engage with Monzo to reach a payment arrangement despite having the opportunity to do so. The call recordings showed Mr B was primarily focused on disputing the scam claim rather than negotiating debt repayment. For the Flex account, Mr B similarly had opportunity to arrange payment but did not engage. Reporting a default as 'satisfied' once paid in full is accurate and fair reporting in accordance with ICO guidelines and industry practice.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website