Not upheld: adverse fraud marker - unjustified placement and impact on financial services access complaint against Monzo Bank Limited

Decision detail

Summary

Mr L complained that Monzo Bank Limited loaded an adverse fraud marker against his name on the Cifas database in December 2020 without sufficient evidence, which remained for approximately five years and caused him distress and financial detriment, including difficulties obtaining business banking facilities. Monzo subsequently removed the marker and paid £250 compensation. Mr L argued the compensation was insufficient given the impact on his business launch and income. The ombudsman found that while Monzo's initial error was acknowledged, the £250 award for distress and inconvenience was fair and reasonable, and declined to award compensation for consequential business losses as these constitute prospective losses to a separate legal entity and are influenced by third-party decision-making outside Monzo's control.

The Ombudsman's reasoning

The ombudsman acknowledged that Monzo erred in loading the marker without sufficient evidence and acted appropriately by removing it swiftly upon complaint. However, the ombudsman distinguished between distress and inconvenience compensation (which is appropriate) and consequential losses (which cannot be awarded for prospective losses or losses to separate legal entities such as a business). The ombudsman noted that third-party businesses are responsible for their own fair decision-making regarding Cifas information, and Monzo cannot be held accountable for their decisions. Given that Mr L demonstrated disruption over a relatively short period and Monzo acted swiftly to remedy the error, the £250 award was found to be fair and proportionate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website