Not upheld: fraud claim and duty of care complaint against Monzo Bank Limited

Decision detail

Summary

Mr T complained that Monzo refused to refund money he lost in a scam involving Certificate of Sponsorship services. Between March and July 2025, Mr T made 18 payments to an individual (X) using funds credited to his account by third parties. Monzo provided fraud warnings and blocked some payments, but Mr T circumvented these controls and continued paying despite warnings from third parties that it was a scam. The ombudsman found that Mr T did not suffer a financial loss because all payments were funded by third-party credits, and evidence suggested Mr T received financial benefit by charging third parties more than he paid X. Therefore, the complaint was not upheld as Monzo could not be held liable for losses borne by third parties.

The Ombudsman's reasoning

The ombudsman found that while Mr T authorized the payments (making them not unauthorized under Payment Services Regulations), he did not suffer a financial loss because all payments were funded by third-party credits. The financial loss was borne by the third parties, not Mr T. Additionally, Mr T appeared to receive financial benefit on at least some payments by charging third parties more than he paid X. Even if Monzo had failed in its duty of care regarding intervention, this would not justify a refund since Mr T did not suffer the loss. Furthermore, Mr T received clear fraud warnings from Monzo but deliberately circumvented the fraud detection system to continue payments, and continued making payments despite third parties warning him of the scam.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website