Not upheld: failure to protect from scam / romance fraud complaint against Monzo Bank Limited

Decision detail

Summary

Miss M complained that Monzo failed to protect her from financial harm when she was manipulated by her ex-partner during a coercive and controlling relationship into sending £1000 from her overdraft. She requested the overdraft be written off and adverse credit file information removed. The ombudsman found that although Miss M was a victim of romance fraud, the payment was authorised under Payment Services Regulations 2017 because she physically made the transaction herself, and the underlying relationship and manipulation do not invalidate consent. While acknowledging that banks should intervene in suspicious transactions, the ombudsman concluded that a single payment to an account in Miss M's own name at an established bank did not warrant intervention by Monzo's automated fraud detection systems. The complaint was not upheld.

The Ombudsman's reasoning

Although Miss M was manipulated and the payment was not for her benefit, the Payment Services Regulations 2017 establish that coercion or deception about the purpose of a payment does not invalidate the consumer's consent when they physically authorise the transaction. While banks should intervene in unusual transactions, a single payment to an account in the customer's own name at an established bank, even if unusual for that account, does not meet the threshold for mandatory intervention when the bank processes millions of transactions daily. The payment value, while significant to Miss M, was not exceptionally high, and the destination (her own account) was less suspicious than payments to cryptocurrency providers or unknown foreign accounts.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website