Not upheld: scam - irresponsible lending / failure to prevent fraud complaint against Monzo Bank Limited

Decision detail

Summary

Miss J complained that Monzo Bank Limited should refund £5,000 she lost to a task-based job scam involving cryptocurrency purchases. She made two payments (£2,000 and £3,000) from her Monzo account to another banking provider to purchase cryptocurrency, which she then forwarded to scammers under the false belief it would be returned with earnings. Monzo blocked the second payment and conducted fraud prevention checks, but Miss J provided inaccurate responses having been coached by scammers on how to respond. The ombudsman found that Monzo's fraud prevention checks were proportionate and reasonable, and that Miss J's inaccurate responses prevented Monzo from discovering the scam. The complaint was not upheld as the ombudsman could not fairly hold Monzo responsible for the loss, particularly given that causation was not established - even with intervention, the misleading information provided would likely have allowed the payments to proceed.

The Ombudsman's reasoning

The ombudsman found that while Monzo should take steps to protect customers from fraud, these obligations are not absolute. The payments were not covered by the Payment Systems Regulator's mandatory reimbursement scheme as funds went to an account in Miss J's own name. The ombudsman determined that Monzo's fraud prevention checks were proportionate to the risks: they explained the concern, questioned Miss J about the payment purpose, confirmed she hadn't been pressured, obtained evidence of account opening, and requested supporting documentation. Crucially, the ombudsman found that even if Monzo had intervened, causation was not established - Miss J's inaccurate responses prevented Monzo from knowing the true circumstances. The ombudsman acknowledged Miss J was manipulated and coached by scammers but could not fairly hold Monzo responsible for the incorrect information she provided. The ombudsman also rejected the argument that additional identity verification checks would have made a difference, as Miss J would likely have provided identification anyway.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website