Partially upheld: irresponsible lending - failure to intervene in persistent overdraft reliance complaint against Monzo Bank Limited
Financial Ombudsman decision DRN-6115667 of 2026-04-16T00:00:00+00:00. irresponsible lending - failure to intervene in persistent overdraft reliance complaint against Monzo Bank Limited. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6115667 |
|---|---|
| Decision date | 2026-04-16T00:00:00+00:00 |
| Firm | Monzo Bank Limited |
| Product | overdraft |
| Claim type | irresponsible lending - failure to intervene in persistent overdraft reliance |
| Outcome | Partially upheld |
| Remedy | Monzo must re-work Miss M's overdraft balance to remove all interest, fees and charges applied from October 2023 onwards. If a balance remains, Monzo should arrange a repayment plan and may record negative credit information backdated to October 2023. If removal of charges results in overpayment, Monzo must return the overpayment plus 8% simple interest from date made until settlement, and remove adverse credit file information. Monzo must account for tax on interest. |
Summary
Miss M complained that Monzo provided an overdraft irresponsibly, initially £200 in January 2020 with six subsequent increases to £2,000 by October 2021. The ombudsman found that the initial overdraft and increases through September 2021 were provided with reasonable and proportionate checks, reflecting Miss M's limited disposable income and improved financial position. However, the ombudsman upheld the complaint in part, finding that from October 2023 onwards, Monzo should have taken active intervention steps beyond sending letters to address Miss M's persistent heavy overdraft usage that had continued for over a year despite warnings. Monzo must remove all interest, fees and charges from October 2023 onwards and arrange appropriate redress including potential refunds with interest or repayment plans.
The Ombudsman's reasoning
The ombudsman found that initial checks and increases through September 2021 were reasonable given the information available and Miss M's improved income position. However, the ombudsman determined that from October 2023 onwards, Monzo should have taken active steps beyond sending letters to address Miss M's persistent heavy overdraft reliance. The continued use of the overdraft for over a year after warnings, combined with Miss M's limited disposable income, meant Monzo should have actively intervened rather than passively accepting non-response to letters.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Monzo Bank Limited, all decisions | 149 | 10% |
Source
Read the original decision on the Financial Ombudsman Service website