Not upheld: scam liability and fraud; application of loan terms post-scam complaint against MONZO BANK LIMITED

Decision detail

Summary

Miss G complained that Monzo Bank held her liable for a loan she took out after being scammed by someone impersonating her banking provider. The scammer convinced her to apply for a loan, which she did, and she subsequently transferred the funds to her own accounts as part of the scam. Monzo refused to write off the debt or cease applying interest, instead offering temporary forbearance. The ombudsman did not uphold the complaint, finding that Miss G remained liable for the loan as she had agreed to its terms and received the funds, and that Monzo had not acted unreasonably in processing the application or refusing to write off the debt post-scam.

The Ombudsman's reasoning

The ombudsman applied the principle that Miss G agreed to the loan terms and received the funds, establishing liability as the starting point. While sympathising with Miss G's status as a scam victim, the ombudsman found Monzo was not obligated to identify fraud risk based on the payment characteristics (higher than usual but to known accounts) or to write off the debt post-scam. The ombudsman noted that recovery attempts would have been futile since funds went to Miss G's own accounts rather than to the scammer.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website