Monzo has wrongly denied refunds to thousands of fraud and scam victims, the Guardian can reveal.
The digital-only bank wrongly rejected more than 1,000 fraud and scam complaints that were closed last year alone, according to data from the Financial Ombudsman Service (FOS).
Fraud and scam complaints can come from victims of authorised push payment (APP) scams, as well as chip and pin fraud and identity theft.
Last year Monzo was deemed to have made the wrong call in 34% of 3,372 cases referred to the FOS. That was the highest rate among the British banks receiving the most complaints.
NatWest ranked second, deemed to have wrongly rejected 33% of 1,972 fraud complaints, and HSBC third, with 32% of 2,535 complaints wrongly rejected.
There is normally a lag between fraud occurring, the customer raising a complaint to the bank, and the FOS later processing escalated complaints. A spokesperson for Monzo said some of the cases related to fraud that had happened more than two years ago.
They said: “Since then, we have continued to invest in technology to stop fraud before it impacts our customers – and it’s working. We prevented 2.9 times the value of fraud in 2025 compared to the year before.”
Fraud has become the most commonly experienced crime in the UK, accounting for an estimated 41% of all offences in England and Wales in the year ending September 2024.
Alex Neill, the co-founder and co-chief executive of the consumer rights organisation Consumer Voice, said fraud and scam victims often faced further distress when making a complaint against their bank.
“People who’ve been scammed aren’t just out of pocket, they are often left feeling worried and ashamed,” she said. “Firms need to play their part and make reimbursement fair, fast and consistent, without forcing victims into a long fight for answers.”
In 2024 the government introduced a new rule that obliges banks to refund most victims of APP fraud tricked and manipulated into transferring money to the criminals.
UK Finance, a body that represents the banking industry, found there were 185,733 APP cases in 2024, down 20% from a peak of 232,427 in 2023. Overall, fraudsters took £450.7m from their victims in 2024, and £267.1m was paid out in compensation.
A spokesperson for the FOS said it received hundreds of cases a week from people who have been victims of fraud and scams.
Monzo, which is online-only, launched in 2015 as a wave of challenger banks such as Revolut and Starling joined the sector. It was valued at £4.5bn in October 2024 when employees sold stock to existing investors.
While its valuation has lagged significantly behind that of Revolut, Monzo has focused most of its growth in the UK and gained a banking licence from British regulators in 2016.
However, last summer the bank was fined £21m by the City regulator over weak financial crime controls, after it allowed customers to register for accounts with “implausible” home addresses – including 10 Downing Street, Buckingham Palace and Monzo’s own headquarters.
A few months later Monzo made the surprise announcement that its chief executive, TS Anil, who has led the company for almost six years, would step down in February. He will be replaced by Diana Layfield, a former Google executive.
Under Anil’s leadership, Monzo trebled its number of customers to more than 14 million. The bank reported a record £60.5m in pre-tax profit in the year to March, with revenue of £1.2bn.
A FOS spokesperson said if someone had been a victim of a scam, they should first speak to their financial provider. “If they don’t feel they’ve been treated fairly by their bank, they should complain to the business first, then get in contact with our free and independent service and we’ll see if we can help,” they said.
A spokesperson for NatWest said its priority was to resolve complaints for customers in the first instance, and it proactively reached out to customers in historic cases to help the FOS clear its backlog of complaints and worked closely with the ombudsman to ensure fair outcomes for its customers.
A spokesperson for HSBC said: “We fully comply with our regulatory obligations around the mandatory reimbursement of scams. Last year, we refunded over 13,000 scam claims and prevented over £130m being defrauded from our customers.
“Financial Ombudsman Service data reflects only the small proportion of cases that were referred to the ombudsman and does not capture the customers we successfully help each year through early intervention, reimbursement, and support.”
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: theguardian.com
