Not upheld: irresponsible lending complaint against Monzo Bank Limited

Decision detail

Summary

Mr W complained that Monzo acted irresponsibly by providing him with a £500 overdraft facility in August 2025, citing his history of poor money management and gambling habits. Monzo had conducted an income and expenditure assessment based on Mr W's declared income of £25,000 per year and expenditure of £1,300 monthly, calculating approximately £270 in monthly disposable income, and obtained a clean CRA report. The ombudsman found that Monzo's checks were proportionate for an early-stage lending relationship with a modest overdraft limit, and that based on information available to Monzo at the time, there were no indicators of financial difficulty. The complaint was not upheld, as the ombudsman concluded Monzo did not lend irresponsibly.

The Ombudsman's reasoning

The ombudsman found that Monzo's checks were proportionate for an early-stage lending relationship with a modest overdraft limit of £500. The checks included income and expenditure assessment and CRA search, which were appropriate given the circumstances. Based on the information available to Monzo at the time of lending, there were no indicators of financial difficulty. Even if Mr W's actual income of £1,700 per month had been declared, the disposable income would still have been sufficient to sustainably repay the modest £500 overdraft, as there was no expectation for full repayment in one lump sum. The ombudsman noted that while Mr W's actual position was worse than it appeared to Monzo, the lender could only be judged on what it ought to have been aware of at the time of lending.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website