Not upheld: account closure, payment blocking, regulatory compliance complaint against Monzo Bank Limited

Decision detail

Summary

Miss I complained that Monzo blocked her legitimate payments, asked intrusive questions, and closed her accounts without proper explanation. She had received £2,477.71 from a friend as a loan and attempted to repay part of it, but Monzo's fraud prevention system flagged the transactions. When Monzo requested documentation to verify the funds' legitimacy, Miss I refused to provide a statement from her account with the loan source, citing privacy concerns, and was unwilling to explain her friend's connection to a management consulting company. The ombudsman found Monzo's blocking of payments, account review, and immediate closure were all reasonable measures in line with regulatory obligations to prevent fraud and financial crime, and that Monzo was not obliged to provide detailed explanations for its decisions.

The Ombudsman's reasoning

The ombudsman found that Monzo's blocking of the payments was a reasonable automated security measure to protect against fraud. The information Monzo requested was standard for regulatory compliance. Monzo's decision to review the accounts was justified given the movement of funds and Miss I's unwillingness to provide requested information, particularly her refusal to explain her friend's connection to company P and her concern about self-incrimination. The account closure was within Monzo's contractual rights and regulatory obligations, and the ombudsman found no evidence of unfair bias or unlawful discrimination. Banks are entitled to close accounts and are not obliged to disclose detailed reasons for closure or account reviews.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website