Not upheld: Direct Debit Guarantee dispute handling and information provision complaint against MONZO BANK LIMITED

Decision detail

Summary

Mr B complained that MONZO improperly handled a Direct Debit Guarantee dispute regarding a gym payment taken after a payment freeze period ended. Mr B claimed the gym failed to notify him that payments would restart and that MONZO did not provide adequate information about why it reversed the refund. The ombudsman found that the DDG is designed for direct debit errors, not contractual disputes, and that Mr B should have known payments would restart after the agreed freeze period. MONZO acted fairly by informing Mr B that the gym had provided evidence the payment was valid and was not obliged to provide additional information. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman concluded that the Direct Debit Guarantee does not apply to disputes between parties regarding contract terms or commercial practices. The complaint was fundamentally a dispute between Mr B and his gym about whether payment restart notice was provided, not a direct debit error. Mr B was responsible for managing his account and should have known payments would restart after the agreed freeze period. MONZO acted fairly by informing Mr B that the gym had provided evidence the payment was not taken in error and was entitled to reverse the refund. No additional information was required from MONZO as there was no error to explain.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website