Not upheld: service failure in chargeback handling and poor communication regarding temporary refund complaint against Monzo Bank Limited

Decision detail

Summary

Mr G complained that Monzo unfairly debited a payment from his account and provided poor service after raising a chargeback dispute regarding a travel company payment. Monzo initially provided a temporary partial refund of £2,053 without clearly explaining it could be reversed, then debited this amount when declining the chargeback claim, causing Mr G to enter his overdraft during the festive period. Monzo accepted its errors in not raising the dispute properly and not communicating clearly, initially offering £50 compensation but later revising its offer to £4,108.25 refund plus 8% interest and £500 compensation. The ombudsman found this revised offer fair and adequate, declining to uphold the complaint for additional compensation despite Mr G's claims of distress and impact on his credit file.

The Ombudsman's reasoning

The ombudsman found that while Monzo failed in its service by not clearly communicating the temporary nature of the refund and not correcting the error promptly, the revised compensation offer was fair and adequate. Monzo's refund of the full disputed amount (£4,108.25), payment of 8% interest from transaction date to settlement, and £500 for distress and inconvenience appropriately placed Mr G back in the position he would have been in had no error occurred. The ombudsman acknowledged Mr G's distress but determined that compensation awards are not punitive and should reflect the actual impact, which was difficult to quantify given Mr G could not provide evidence of missed payments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website