Not upheld: scam loss refund / authorized payment to scammer complaint against Monzo Bank Limited

Decision detail

Summary

Mr S complained that Monzo Bank Limited should refund approximately £380 he lost after making a card payment to a trading platform on the advice of a scammer he met on social media. The scammer allegedly gained control of Mr S's trading account and the money disappeared. Monzo declined to refund and paid £90 compensation for minor customer service issues. The ombudsman found the complaint not upheld because: (1) there was insufficient evidence the full amount was actually lost to a scam, given missing details about what was offered and what happened to the funds; and (2) even if a scam were established, Monzo had no obligation to intervene in a single, modest payment to a payee Mr S had used before, and had no realistic recovery mechanism available. The £90 compensation already paid was deemed fair for the minor service failures identified.

The Ombudsman's reasoning

The ombudsman applied a two-stage test: first, whether there was sufficient evidence the payment was lost to a scam (finding there was not, due to lack of evidence showing what was offered, what was requested, or what happened to the money); and second, even if a scam were established, whether Monzo should have intervened or recovered the funds. On the second point, the ombudsman found that the payment was not unusual enough to warrant intervention (it was a single payment of modest size to a familiar payee, authorized securely), and that there was no realistic recovery mechanism available (no appropriate chargeback reason, and the merchant provided the service promised). The ombudsman concluded Monzo had no legal obligation to refund under the Payment Services Regulations.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website