Partially upheld: irresponsible lending and inadequate treatment of vulnerable consumer complaint against Monzo Bank Limited

Decision detail

Summary

Mr S complained that Monzo treated him unfairly by increasing his overdraft limit after he disclosed gambling issues and vulnerability, and that gambling blocks applied to his account failed to prevent gambling transactions. The ombudsman found that Monzo provided appropriate support and advice after Mr S's disclosure on 9 March 2025, including offering to block specific overseas gambling sites if Mr S provided merchant codes. However, the ombudsman upheld the complaint regarding the overdraft increase on 16 May 2025, finding it irresponsible given Monzo's knowledge of Mr S's gambling issues. The ombudsman rejected Mr S's request for refund of gambling transactions, as Monzo had informed him of blocking options but Mr S did not provide necessary information. Monzo was ordered to refund interest and fees from the overdraft increase and pay £300 compensation for distress and inconvenience.

The Ombudsman's reasoning

The ombudsman found that Monzo provided appropriate support and advice after Mr S disclosed his vulnerability and gambling issues on 9 March 2025, including offering to block specific overseas gambling sites if Mr S provided the correct MCC. However, Monzo acted irresponsibly by increasing Mr S's overdraft limit from £1,000 to £2,000 on 16 May 2025, knowing about his gambling issues and that additional funds could be used to gamble. The gambling block's failure to block overseas sites using incorrect MCC was not Monzo's fault, as Mr S did not provide the specific merchant codes needed for Monzo to block those sites. The ombudsman rejected Mr S's request for refund of gambling transactions, as Monzo had informed him of the option to block specific sites but Mr S did not provide the necessary information.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website