Not upheld: Fraud reimbursement (APP scams) complaint against Monzo Bank Limited

Decision detail

Summary

Miss H complained that Monzo should reimburse £40,300 she transferred to her boyfriend Mr D between December 2024 and February 2025, claiming she was induced through deception, manipulation and coercive control. Miss H had taken out loans to fund these payments, which Mr D said were needed to repay debts and for cryptocurrency trading, with an agreement that he would repay her. When Mr D failed to repay and the relationship ended, Miss H reported the matter to police and claimed it was an APP scam. The ombudsman found the payments were authorised under payment regulations and did not meet the definition of an APP scam, as there was insufficient evidence Mr D never intended to repay Miss H at the time of the transfers. Monzo was also not on notice of vulnerability or coercion based on Miss H's misleading explanation to them that the payments were for a wedding. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the objective test under the Payment Service Regulations 2017, finding that Miss H authorised the transactions by using her online banking. However, the key issue was whether the payments met the definition of an APP scam under the Reimbursement Rules. An APP scam requires fraudulent or dishonest conduct to manipulate or deceive a consumer into transferring funds where the recipient is not who the consumer intended to pay or the payment is not for the intended purpose. The ombudsman found that while Mr D may have misrepresented the reason for needing money, there was insufficient evidence that he never intended to repay Miss H at the time the payments were made. The payments were intended as informal loans, and the ombudsman could not conclude it was more likely than not that Mr D intended to steal the funds from the outset. The ombudsman also found Monzo had no notice of vulnerability or coercion based on Miss H's misleading explanation about the payments being for a wedding.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website