Partially upheld: scam claim rejection and service failures in claims handling complaint against Monzo Bank Ltd

Decision detail

Summary

Mr S paid a builder £13,550 between May and August 2023 for building work, with a total of around £25,000 paid overall. The builder left the site without completing the work, and Mr S raised a scam claim with Monzo in October 2023. Monzo rejected the claim as a civil dispute. The ombudsman found that whilst Mr S suffered a significant loss, the situation did not meet the CRM Code definition of an APP scam because some work was completed and there was no evidence of fraudulent intent from the outset. However, the ombudsman upheld the complaint in part, finding that Monzo's communications were unclear and unhelpful, particularly between January and March 2024 when Monzo repeatedly suggested it was investigating despite having already made a decision, which was inappropriate given Mr S's known vulnerabilities. Monzo was ordered to pay £200 compensation for these service failures.

The Ombudsman's reasoning

The ombudsman found that whilst Mr S suffered a significant financial loss, this does not mean Monzo is responsible for reimbursement. The payments were authorised by Mr S and the CRM Code definition of an APP scam was not met because: (1) Mr S paid the person he intended to pay; (2) some work was completed by the builder; (3) there was no evidence of fraudulent intent from the outset; and (4) the situation constituted a civil dispute regarding defective workmanship and non-completion, which banks are not responsible for. However, Monzo's service fell short in its communications with Mr S. Between January and March 2024, Monzo repeatedly told Mr S it was investigating when a decision had already been made, which was unhelpful given Mr S's known vulnerabilities. Monzo should have managed Mr S's expectations better and communicated more clearly.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website