Partially upheld: chargeback disputes and failure to identify vulnerability complaint against Monzo Bank Limited

Decision detail

Summary

Miss L, who has a compulsive gambling problem, gambled over £17,000 through her Monzo account between June and October 2025 using websites with incorrect merchant codes that bypassed her safeguards. She requested chargebacks for over 165 transactions claiming misrepresentation. The ombudsman found Monzo correctly refused the chargebacks as Mastercard scheme rules explicitly prohibit chargeback rights for gambling transactions, and the misrepresentation claim did not apply since Miss L fully authorised all transactions. However, the ombudsman partially upheld the complaint because Monzo failed to identify Miss L as vulnerable in September 2025 when flagged by its financial crime team and should have offered tailored support, awarding £80 compensation for this failing.

The Ombudsman's reasoning

The ombudsman agreed with Monzo that Mastercard's chargeback scheme explicitly prohibits chargeback rights for gambling-related transactions. The misrepresentation claim (reason code 4853) did not apply because Miss L was fully authorising transactions, knew she was gambling, could withdraw winnings, and all transactions completed successfully. The single approved chargeback was approved in error by automatic processor when the merchant did not challenge it, not because the claim had merit. However, Monzo failed to identify Miss L as vulnerable in September 2025 when flagged by financial crime team and should have offered tailored support at that point.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website