Upheld: irresponsible lending and failure to provide appropriate support to vulnerable customer; unfair credit file reporting complaint against Monzo Bank Limited

Decision detail

Summary

Miss W complained that Monzo Bank Limited failed to respond appropriately when she requested help setting up a repayment plan for her overdraft in June 2025. She disclosed vulnerabilities affecting her financial decision-making but Monzo did not follow up for almost five weeks, and a plan was not agreed until October 2025. Miss W exceeded her overdraft limit on 1 August 2025 (due to Monzo's own fees) and the account was defaulted on 3 November 2025. The ombudsman upheld the complaint, finding Monzo failed to provide appropriate support to a vulnerable customer and that had it acted promptly in mid-June, Miss W would likely not have exceeded her limit. The ombudsman ordered Monzo to remove the default, report the account as being in an arrangement to pay from 1 July 2025, and refund interest and charges from that date.

The Ombudsman's reasoning

The ombudsman found that Monzo's failure to respond promptly to Miss W's request for help in mid-June 2025 was a critical failure on Monzo's part. Had Monzo acted promptly, Miss W would likely not have exceeded her overdraft limit on 1 August 2025, as the only debits causing the excess were overdraft fees applied by Monzo itself. The ombudsman rejected Monzo's argument that a zero affordability plan would have produced the same outcome. Critically, Monzo failed to provide appropriate support to a vulnerable customer as required by FCA rules, despite Miss W's proactive disclosure of her vulnerabilities and impaired decision-making. The ombudsman found it was not appropriate for Monzo to allow weeks to pass with no progress when it should have anticipated Miss W's difficulties in maintaining focus.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website