Not upheld: authorised push payment (APP) scam - receiving PSP liability complaint against Monzo Bank Limited

Decision detail

Summary

Mr F lost £78 in an APP scam when he sent money to a Monzo account for collectable coins he never received. Bank R declined reimbursement, classifying it as a civil dispute rather than an APP scam, and did not notify Monzo. The ombudsman examined whether Monzo, as the receiving PSP, failed to prevent the loss through inadequate account opening procedures, insufficient account monitoring, or poor response to fraud notification. Finding that Monzo properly verified the account holder's identity, detected no suspicious activity, and could not have recovered funds (which had already been withdrawn), the ombudsman concluded Monzo had no liability and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman assessed whether Monzo failed in three areas: account opening procedures, account monitoring, and response to fraud notification. On account opening, Monzo properly verified identity and conducted due diligence with nothing to suggest fraudulent intent. On account monitoring, there was no suspicious activity that would reasonably have alerted Monzo to fraud. On recovery, even if Monzo had been notified when Mr F first reported to Bank R, the funds had already been withdrawn or utilised, making recovery impossible. Therefore, Monzo could not have prevented the loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website