Partially upheld: account closure, fund recovery, complaint handling complaint against Monzo Bank Limited
Financial Ombudsman decision DRN-6240152 of 2026-04-13T00:00:00+00:00. account closure, fund recovery, complaint handling complaint against Monzo Bank Limited. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6240152 |
|---|---|
| Decision date | 2026-04-13T00:00:00+00:00 |
| Firm | Monzo Bank Limited |
| Product | current account |
| Claim type | account closure, fund recovery, complaint handling |
| Outcome | Partially upheld |
| Remedy | Monzo Bank Limited must pay Mr M £100 compensation for the trouble and upset caused by its poor complaint handling service. |
Summary
Mr M complained that Monzo blocked and closed his current account after he received two payments totalling £1,820 from individuals on a peer-to-peer cryptocurrency trading platform, which he claimed were legitimate currency conversions for university fees and accommodation. Monzo received fraud reports indicating the senders had been victims of job scams and returned approximately £1,600 to source. The ombudsman found Monzo's actions to block and close the account were justified based on legitimate fraud concerns, including name mismatches between the confirmed cryptocurrency buyers and the actual payment senders. However, the ombudsman upheld the complaint in part, finding that Monzo's complaint handling fell short by not addressing all complaint points in its initial response and providing conflicting information, warranting £100 compensation rather than the £15 originally offered.
The Ombudsman's reasoning
The ombudsman found that Monzo's decision to block the account was legitimate and in line with legal and regulatory obligations to prevent financial crime, particularly multi-stage fraud involving cryptocurrency. The decision to return the funds to source was reasonable because: (1) fraud reports indicated the senders were victims of job scams; (2) the names of the cryptocurrency buyers differed significantly from the names associated with the payments; (3) one buyer arranged for a third party to send payment contrary to platform terms; and (4) Mr M should have questioned why payments came from different people than the confirmed buyer names. However, Monzo's complaint handling fell short by not addressing all complaint points in its initial response and providing conflicting information subsequently. The ombudsman rejected Mr M's claims for refund of the returned funds but upheld the complaint regarding poor service in complaint handling.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Monzo Bank Limited, all decisions | 170 | 11% |
Source
Read the original decision on the Financial Ombudsman Service website