Not upheld: account closure and default reporting; treatment of vulnerable customer complaint against Monzo Bank Limited

Decision detail

Summary

Miss H complained that Monzo Bank Limited unfairly closed her current account and recorded a default on her credit file. Her account had exceeded the agreed £2,000 overdraft limit from February 2025, and despite regular contact attempts via email and in-app chat, she did not reduce the balance by the 4 June 2025 deadline. Although Miss H was going through difficult circumstances (caring for a seriously ill family member and pregnancy), she had not disclosed these to Monzo, and the ombudsman found no visible signs that would have indicated she needed additional support. The ombudsman upheld Monzo's position that the account closure and default recording were reasonable given the clear notice provided and the failure to meet the deadline.

The Ombudsman's reasoning

The ombudsman found that Monzo's communication methods (email and in-app chat) were reasonable for an online bank and that Miss H had previously engaged via these channels. The contact was regular and clear about the requirement to reduce the balance. Although Miss H mentioned the Financial Ombudsman Service was handling her irresponsible lending complaint, this did not suspend her obligation to maintain the account within the agreed overdraft limit, and Monzo had not been told to freeze collection efforts. The ombudsman acknowledged Miss H's difficult circumstances but found she had not disclosed her vulnerability to Monzo at the time, and there were no visible signs that would have prompted Monzo to modify its approach. Therefore, the account closure and default recording were reasonable given the clear notice provided and the account balance remaining above the limit beyond the deadline.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website