Not upheld: unfair application of default to credit file complaint against MONZO BANK LIMITED

Decision detail

Summary

Mr A complained that Monzo unfairly applied a default to his credit file. Monzo initially made an error by applying a default on 18 August 2023 one day after agreeing a repayment plan, but corrected this by setting up a new repayment plan on 29 August 2023 with the default to be replaced with 'in arrangement'. However, Mr A failed to make the required payments under the new plan, and after two missed payments, Monzo re-applied the default in October 2023. The ombudsman found that while Monzo had service issues including delays and poor communication, the re-application of the default was justified given Mr A's non-payment, and upheld the £100 compensation as reasonable for the service failures.

The Ombudsman's reasoning

The ombudsman found that while Monzo made an initial error in applying a default on 18 August 2023 (which it corrected by agreeing a new repayment plan on 29 August 2023), the subsequent re-application of the default in October 2023 was justified. Mr A was sent clear details of the repayment plan via multiple communication channels (SMS, email, and app) and failed to make the required payments. The ombudsman found no evidence that Mr A was told not to make payments while his complaint was pending. Although Monzo had service issues including delays and poor communication, these did not prevent the default from being appropriately re-applied given Mr A's non-payment. The £100 compensation was deemed reasonable for the service failures.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website