Not upheld: irresponsible lending complaint against Monzo Bank Limited

Decision detail

Summary

Ms H complained that Monzo acted irresponsibly in granting her an overdraft of £1,000 in December 2023 and increasing it to £2,000 in April 2025, claiming this worsened her financial situation. The ombudsman found that Monzo's initial checks were reasonable and proportionate, including income verification, credit file checks, and affordability assessment. During the annual review in December 2024, although Ms H used her overdraft regularly, she demonstrated the ability to reduce or return it to a credit balance within weeks with no other signs of financial distress. The ombudsman concluded Monzo acted fairly and did not uphold the complaint, finding Monzo's offer to refund interest and charges from April 2025 to be fair and sufficient.

The Ombudsman's reasoning

The ombudsman found that Monzo's initial checks were reasonable and proportionate for the overdraft limit granted. The monitoring and annual review checks were sufficient, as Ms H demonstrated the ability to manage her overdraft by reducing balances within weeks and showed no other significant signs of financial distress. The pattern of usage suggested Ms H was aware of her balance and was relying on the overdraft as part of her overall financial situation, but this did not indicate she was unable to repay or that the overdraft was contributing to financial deterioration.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website