Not upheld: Account closure without notice complaint against Monzo Bank Limited

Decision detail

Summary

Mr A complained that Monzo unfairly loaded a fraud marker against him in September 2025 after he received fraudulent funds, which he explained was a scam. The marker remained for five months until February 2026 when Monzo upheld his complaint and offered £250 compensation. Mr A argued the compensation was inadequate given the significant disruption, including account closures and inability to bank normally. The ombudsman found that while the fraud marker caused genuine distress and likely contributed to at least one account closure, the £250 offer was fair under FOS compensation principles, which aim to restore rather than punish, and that other claimed impacts lacked sufficient evidence of causation.

The Ombudsman's reasoning

The ombudsman accepted that Monzo unfairly loaded the fraud marker and focused on assessing the impact and appropriate compensation. While acknowledging that the fraud marker likely contributed to at least one confirmed account closure and caused Mr A distress, anxiety, and financial disruption, the ombudsman found insufficient evidence to link other claimed impacts (undated account closures, debt collection notice to different name) to Monzo's error. The ombudsman applied FOS compensation principles, which are restorative rather than punitive, and concluded that £250 fairly reflected the proven impact of the five-month period during which the marker was incorrectly loaded.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website