Not upheld: Fraud reimbursement (APP scams) complaint against Monzo Bank Limited

Decision detail

Summary

Mr K made over 120 payments totalling a significant sum to an overseas online casino (B) between January and March 2026 for gambling purposes. When he was unable to successfully withdraw his winnings due to repeated KYC verification requests, he disputed the payments with Monzo, claiming he had been scammed. Monzo declined to refund the payments, treating the matter as a civil dispute between Mr K and B. The ombudsman found that the payments did not constitute an APP scam under the Reimbursement Rules, as Mr K paid the intended recipient for the intended purpose, and that B's KYC procedures, while frustrating, did not evidence fraudulent intent. The ombudsman also found that Monzo could not reasonably have detected Mr K's vulnerability to excessive gambling from his account activity and that Monzo appropriately offered support once it became aware of his gambling concerns. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the definition of an APP scam under the Reimbursement Rules, which requires that either the recipient is not who the consumer intended to pay, or the payment is not for the purpose the consumer intended. The ombudsman found that Mr K paid the intended party (B) for the intended purpose (gambling), as evidenced by his funds crediting his account and his ability to use them for gameplay over a three-month period. While B's withdrawal processes were frustrating and involved questionable KYC practices, this did not constitute fraudulent deception about the purpose of the payments. The ombudsman also found that Monzo could not reasonably have detected Mr K's vulnerability to excessive gambling from his account activity alone, as the transactions did not stand out as suspicious, were not identifiably gambling transactions, and Mr K's account remained in credit. Although Monzo could have intervened earlier, the ombudsman was not persuaded this would have prevented Mr K from continuing to gamble, as it was a legal activity and not out of character for his account.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website