Not upheld: irresponsible lending and failure to provide forbearance complaint against Monzo Bank Limited
Financial Ombudsman decision DRN-6215058 of 2026-05-06T00:00:00+00:00. irresponsible lending and failure to provide forbearance complaint against Monzo Bank Limited. Outcome: Not upheld.
Decision detail
| Reference | DRN-6215058 |
|---|---|
| Decision date | 2026-05-06T00:00:00+00:00 |
| Firm | Monzo Bank Limited |
| Product | overdraft |
| Claim type | irresponsible lending and failure to provide forbearance |
| Outcome | Not upheld |
| Remedy | No remedy ordered. The ombudsman encouraged Miss H to engage further with Monzo to discuss affordability if she still considers the overdraft unaffordable, and reminded Monzo of its ongoing obligations to treat Miss H fairly and sympathetically. |
Summary
Miss H complained that Monzo irresponsibly provided her with a £1,000 overdraft facility in January 2022 when she was already overindebted, and failed to provide forbearance when renewing the facility despite signs of financial difficulty. Monzo rejected the complaint, stating its checks were proportionate and it had acted fairly. The FOS investigator did not uphold the complaint, and Miss H requested an ombudsman review. The ombudsman found that Monzo's initial checks were reasonable and proportionate based on Miss H's declared income of £25,700, living situation, and verified credit commitments of £590 monthly. Regarding renewals, the ombudsman found no evidence of financial difficulty, as Miss H's account showed discretionary spending only, regular transfers to maintain the balance within limits, no missed payments, and evidence of savings capacity, leading to the conclusion that she was choosing to use the overdraft rather than being reliant on it. The complaint was not upheld.
The Ombudsman's reasoning
The ombudsman applied the FOS approach to irresponsible and unaffordable lending, finding that Monzo's initial checks were reasonable and proportionate given the £1,000 limit and information obtained. Miss H's declared income of £25,700, living situation, and verified credit commitments of £590 monthly supported the lending decision. Regarding renewals, the ombudsman found no evidence of financial difficulty: Miss H's account showed discretionary spending only, regular transfers to maintain the balance within limits, no missed payments, and she held a savings account demonstrating budgeting capacity. The ombudsman concluded Miss H was choosing to use the overdraft for discretionary purposes rather than being reliant on it for essential commitments, and that Monzo reasonably identified her as a repeat user but not someone showing signs of actual or potential financial difficulty.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Monzo Bank Limited, all decisions | 149 | 10% |
Source
Read the original decision on the Financial Ombudsman Service website