Not upheld: fraud reimbursement and interest on delayed reimbursement complaint against Monzo Bank Limited

Decision detail

Summary

S invested £376,062.50 in a fraudulent investment scheme through their Monzo account and received only £44,400 in return. When the scam was discovered, Monzo initially declined reimbursement citing a police investigation but later accepted the investment was fraudulent and reimbursed S in January 2026, though to the wrong account (£75 compensation offered). S sought 8% statutory interest on the reimbursement for loss of use of funds. The ombudsman found Monzo's reimbursement under the CRM code appropriate but declined to award interest, reasoning that S had entered into outside investment agreements with external investors who bore the ultimate losses, and that awarding interest would compensate for anticipated profit from a scheme never likely to generate legitimate returns.

The Ombudsman's reasoning

While Monzo's reimbursement under the CRM code was appropriate, the ombudsman declined to award interest on the reimbursed funds. The ombudsman reasoned that S had entered into outside investment agreements requiring payments to external investors, meaning the losses were ultimately to those investors due to S's inability to fulfil commercial agreements. Since the fraudulent scheme was never likely to generate legitimate returns, awarding interest would constitute compensation for anticipated profit rather than genuine loss of use. The ombudsman also noted that funds from external investors did not appear to have been used for the fraudulent scheme and that director's loans had been repaid.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website