Not upheld: payment error and fund recovery complaint against Monzo Bank Limited

Decision detail

Summary

Mr A accidentally transferred £500 to a payee with a similar name to his intended recipient on 29 December 2025. He contacted Monzo within minutes of realising the error. Monzo initiated the Credit Recovery Process with the receiving bank within approximately 5 hours, but was only able to recover £7.28 due to insufficient funds in the recipient's account. The ombudsman found that Monzo had made no error, correctly executed the payment instruction, and acted promptly in attempting recovery. The complaint was not upheld as Monzo bore no responsibility for the loss.

The Ombudsman's reasoning

Monzo correctly executed Mr A's payment instruction and had no way of knowing an error had been made until Mr A contacted it. Although Mr A contacted Monzo within minutes, the payment could not be stopped as it was already processed. Monzo initiated the recovery process within a reasonable time (approximately 4 hours and 54 minutes after the payment). The failure to recover most funds was due to insufficient funds in the recipient's account, not any delay or error by Monzo. While sympathetic to Mr A's financial situation, the ombudsman found no error by Monzo to justify requiring compensation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website