Upheld: failure to implement adequate safeguards for vulnerable customer; failure to block payments despite knowledge of compulsive gambling complaint against Monzo Bank Limited

Decision detail

Summary

Mr H, who suffers from compulsive gambling, opened a Monzo account in 2024 specifically because it advertised the ability to block payments to specific merchants. He disclosed his gambling problem to Monzo and identified two merchants he was using to circumvent gambling blocks. Monzo implemented card-based merchant blocks by July 2024, but Mr H immediately switched to using faster payments (bank transfers) to continue gambling through merchant A. Despite knowing by October 2024 that Mr H was making faster payments to this merchant, Monzo took no action for nearly a year, allowing Mr H to spend approximately £22,000 on gambling. When Monzo finally implemented faster payment blocks in June 2025, they successfully stopped his gambling. The ombudsman upheld the complaint, finding Monzo should have implemented the faster payment blocks much earlier given its knowledge of Mr H's vulnerability and circumstances, and ordered refunds of the faster payments, overdraft charges, and £500 compensation.

The Ombudsman's reasoning

The ombudsman found that Monzo had sufficient information by mid-2024 to take reasonable action to protect Mr H. Although Mr H authorised the payments, he was in a vulnerable situation and had explicitly asked for help. Monzo knew Mr H was continuing to send significant sums to a merchant he had previously used for gambling, using a different payment method. The evidence strongly suggested that had Monzo implemented faster payment blocks earlier, it would have stopped Mr H from gambling, as demonstrated by the successful blocking of his attempts after June 2025. Monzo's failure to act despite knowing the circumstances for nearly a year constituted avoidable distress and inconvenience. However, the ombudsman declined to award 8% interest as the payments were authorised by Mr H, and the wider financial harm was caused by his compulsive gambling rather than directly by Monzo's actions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website