Partially upheld: customer service failure; inadequate assistance following customer error; potential irresponsible lending (not upheld) complaint against Monzo Bank Limited
Financial Ombudsman decision DRN-6422853 of 2026-06-12T00:00:00+00:00. customer service failure; inadequate assistance following customer error; potential irresponsible lending (not upheld) complaint against Monzo Bank Limited. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6422853 |
|---|---|
| Decision date | 2026-06-12T00:00:00+00:00 |
| Firm | Monzo Bank Limited |
| Product | Personal loan |
| Claim type | customer service failure; inadequate assistance following customer error; potential irresponsible lending (not upheld) |
| Outcome | Partially upheld |
| Remedy | Monzo Bank Limited to pay Miss G £250 compensation for distress and inconvenience caused by Monzo's failure to assist in rescheduling the loan after Miss G identified her mistake. |
Summary
Miss G took a top up loan with Monzo expecting to borrow an additional £850 over 12 months, but the application resulted in her existing loan being consolidated with the top up into a single loan with repayments increasing from £260 to £861 monthly. On the day of drawdown, Miss G contacted Monzo requesting cancellation and reversion to her original loan terms, but Monzo advised she would need to repay the entire balance or accept a credit-damaging repayment plan. Miss G resolved the situation within three days by refinancing with another bank. The ombudsman upheld the complaint regarding Monzo's failure to assist, finding that Monzo should have offered to reschedule the loan over a longer term, but rejected the irresponsible lending complaint as Miss G suffered no financial loss. Compensation of £250 was awarded for distress and inconvenience.
The Ombudsman's reasoning
The ombudsman found that while Miss G accepted a credit agreement with clear terms, Monzo failed to provide adequate assistance once Miss G identified her mistake on the day of drawdown. The ombudsman rejected the irresponsible lending complaint because Miss G suffered no financial loss (she refinanced at a lower rate and paid minimal interest). However, the ombudsman upheld the complaint regarding Monzo's service failure, finding that Monzo should have proactively offered to reschedule the loan over a longer term rather than placing the burden on Miss G to either pay £861 monthly, accept a credit-damaging repayment plan, or refinance elsewhere. The ombudsman awarded £250 compensation for the distress caused during the period when Miss G believed she would have to find £861 monthly, acknowledging that while Miss G bore some responsibility for accepting the agreement, Monzo as the expert in the relationship could have done significantly more to help.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Monzo Bank Limited, all decisions | 170 | 11% |
| Personal loan, all decisions | 22,070 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website