Not upheld: Authorised Push Payment (APP) Scam - Refund Eligibility and Fraud Prevention complaint against Monzo Bank Limited

Decision detail

Summary

Mr F lost £4,275 to a rental property scam involving three payments made to an account controlled by a fraudulent agent. Monzo refused to refund the loss, citing that the Reimbursement Rules do not apply to payments settled outside the UK. The ombudsman upheld Monzo's decision, finding that the payments were settled to a Gibraltar-based PSP account, placing them outside the scope of the Reimbursement Rules. Although the payments were larger than Mr F's typical spending, Monzo's intervention on the second payment was reasonable and proportionate. The ombudsman found no basis to hold Monzo liable for the loss.

The Ombudsman's reasoning

The Reimbursement Rules only apply to APP scam payments settled to accounts held in the UK. Because the payments were settled to a Gibraltar-based PSP account, the Reimbursement Rules do not apply regardless of whether Mr F knew this. While banks should take proactive steps to protect customers from fraud, the payments, though larger than typical, did not present a clear enough picture to warrant intervention beyond the reasonable step Monzo took on the second payment. Monzo processed authorised payments as instructed and made reasonable recovery attempts that were unsuccessful due to lack of response from the beneficiary bank.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website