Not upheld: Card / payment disputes complaint against Monzo Bank Limited

Decision detail

Summary

Mr B complained to Monzo about refund claims related to transactions with gambling websites. Monzo did not pursue a chargeback or proactively block the transactions. The ombudsman examined whether Monzo should have raised a chargeback claim and whether they should have blocked the transactions based on merchant category codes (MCCs) and transaction patterns. The ombudsman found that Mastercard rules explicitly prohibit chargebacks for gambling use, and that the gambling websites used non-gambling MCC codes set by their acquirers, not the merchants themselves. The ombudsman concluded that Monzo lacked sufficient evidence at the time to identify the transactions as gambling-related and that it would be unreasonable to expect proactive blocking based on transaction volume alone. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Monzo could not have proactively blocked the transactions because: (1) Mastercard rules explicitly prohibit chargebacks for gambling use, making a chargeback claim unlikely to succeed; (2) the gambling websites used non-gambling MCC codes, and Monzo would have needed evidence that these codes were incorrect before blocking; (3) merchants do not set their own MCCs - the acquirer does; (4) high transaction volume alone does not justify account restriction; (5) Monzo had no evidence at the time that the transactions were gambling-related; and (6) Monzo was not aware of gambling harm until the claim was raised. The ombudsman concluded that Monzo could only act based on evidence available at the time and that it would be unreasonable to expect proactive review of all transactions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website