Not upheld: account restriction based on credit reference data / credit decision complaint against Monzo Bank Limited

Decision detail

Summary

Mr S complained that Monzo unfairly restricted his Flex account's money transfer functionality based on a credit entry he had told them was disputed and under formal investigation. Although Mr S had informed Monzo in August 2025 that the entry from company X was incorrect, Monzo relied on this data during an October 2025 account review and applied the restriction. The ombudsman found that Monzo acted fairly because a dispute does not constitute a correction, and Monzo had no independent way to verify the entry's accuracy while the dispute remained ongoing. The ombudsman noted the restriction was limited in scope and that the unfairness lay with the inaccurate reporting itself, not with Monzo's reliance on industry-standard credit data. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while Mr S had informed Monzo the entry was disputed, this did not oblige Monzo to disregard it. A dispute is not a correction and remains unresolved until concluded. Monzo was entitled to rely on industry-standard credit reference agency data available to them at the time of review. The restriction was limited in scope, allowing purchases to continue. The unfairness arising from the inaccurate reporting lies with the company that submitted the entry, not with Monzo's reliance on that data before resolution.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website