Monzo Bank Ltd · DRN-5674309

The complaint Mr T complains that Monzo Bank Ltd did not handle his claim in respect of faulty goods properly. What happened In September 2023 Mr T ordered an electrical item online at a cost of £799 using his Monzo credit card. Mr T encountered some issues with the item in July 2024 and contacted the merchant. It sent replacement parts and when these did not resolve the problem it sent further replacement parts. After further exchanges the merchant agreed to repair the goods in February 2025. It sent Mr T a prepaid returns label, but no packaging. It suggested he source a box locally. Mr T did not consider that was reasonable and he believed it contravened consumer law. The matter was escalated and the merchant agreed to take the goods back and give Mr T a full refund. Mr T was still obliged to find a suitable box and the merchant required him to sign a release document which Mr T did not believe was acceptable. In February 2025 Mr T contacted Monzo seeking its support in resolving the dispute. It asked for more details using the same form as Mr T had used when he made his claim. He responded without delay but Monzo did not consider he had provided the information it needed. He then spoke to the bank using its chat function. Monzo asked him for a copy of the warranty and the exchanges he had had with the merchant. Mr T then provided some more evidence, but Monzo did not consider this answered its questions. Mr T was provided with an email address and he responded. Mr T disputes that he did not supply the bank with the relevant information. The bank wrote to Mr T on 12 March to say that it could not take the dispute any further as the merchant had offered to repair the goods and had sent a prepaid returns label so it did not consider there had been a breach of contract. Mr T didn’t consider that was a fair response and did not take account of the relevant consumer law, but this did not persuade Monzo to alter its stance. Mr T brought a complaint to this service where it was considered by one of our investigators who didn’t recommend it be upheld. Around the same time Mr T took legal action against the merchant and submitted a claim to the court. I understand this was not defended by the merchant and the case was found in his favour. He says he was refunded in May 2025. Mr T has asked that his complaint be considered by an Ombudsman What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having considered all the evidence and argument put forward by both parties I do not consider I can uphold this complaint. I will explain why.

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I want to acknowledge that I’ve summarised the events of the complaint. I don’t intend any discourtesy by this – it just reflects the informal nature of our service. I also want to assure Mr T that I’ve reviewed everything on file. If I don’t comment on something, it’s not because I haven’t considered it. It’s because I’ve concentrated on what I think are the key issues. Our powers allow me to do this. Firstly, I should make it clear that the role of the Financial Ombudsman Service is to resolve individual complaints and to award redress where appropriate. I do not perform the role of the industry regulator and I do not have the power to make rules for financial businesses or to punish them. Mr T has raised his concerns about other issues he has had with Monzo and more widely about its handling of similar claims. I must make it clear that I am only dealing with his complaint about its handling of his claim for this one purchase. I would add that complaint handling is not a regulated activity and in the circumstances of this case I do not consider I can expand my decision into covering Mr T’s wider concerns about Monzo’s complaint processes. There were two routes open to Mr T when seeking redress from the merchant via Monzo. The first was a chargeback and the second was a claim under Section 75 Consumer Credit Act 1974 (“s.75”). Chargeback is a voluntary scheme run by the card scheme operator (here it’s Mastercard) to process settlement disputes between the card issuer (such as Monzo) – on behalf of the cardholder (Mr T) – and the merchant. It is not a legal right that the cardholder has. Mastercard sets the chargeback rules and time limits for transactions made using the Mastercard card scheme. And it is Mastercard that decides whether a chargeback is successful – the card issuer simply makes a request on the cardholder’s behalf. If the card issuer knows it is out of time, or is unlikely to succeed, I wouldn’t necessarily expect it to raise a chargeback. Under Mastercard’s rules applicable to this case, a chargeback must be requested within (i) 120 days of the transaction processing date or (ii) within 120 days of the last date the cardholder expected to receive the goods or services (but not exceeding 540 days from the transaction processing date). Mr T has referred to consumer law in the pursuit of his claim. However, Monzo isn’t obliged to help Mr T enforce his rights under these regulations in the same way a court might. It’s important to note that what consumer law requires and what is required under the chargeback process are two different and separate things. Essentially the chargeback scheme is not subject to these legal provisions. This is because a chargeback is not a legal right but a commercial scheme subject to the rules set down by the card scheme, which are governed by the card scheme and which Monzo needs to follow. Although Monzo did not refer to the time limits I agree with our investigator that Mr T was too late for a successful chargeback to be raised. I also do not consider the chargeback regime would have helped Mr T in any event. Given the merchant’s offer to repair the goods and later to provide Mr T with a refund I doubt if Mastercard would have upheld any chargeback made by Monzo so I do not consider it did anything materially wrong in its handling of the chargeback claim. The second option available to Mr T was a claim under s.75. This legislation offers protection to customers who use certain types of credit to make purchases of goods or services. Under s. 75 the consumer has an equal right to claim against the provider of the credit or the retailer providing the goods or services, if there has been a misrepresentation or breach of

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contract on the supplier’s part. For s. 75 to apply, the law effectively says that there has to be a  Debtor-creditor-supplier agreement and  A clear breach of contract or misrepresentation by the supplier in the chain. Our role isn’t to say if there has been a breach of contract or a mis representation for a valid claim under s. 75 but to consider if Monzo has come to a fair outcome based on the evidence provided. I am satisfied the required agreement is in place and so I must consider if there has been a breach of contract or misrepresentation. Mr T has not proposed that there was misrepresentation, but that there was a breach of contract. His key issue with the merchant is its alleged failure to adhere to consumer law. In particular, The Consumer Rights Act, Section 23 – “Right to repair or replacement states the following: (2) if the consumer requires the trader to repair or replace the goods, the trader must— (a) do so within a reasonable time and without significant inconvenience to the consumer, and (b) bear any necessary costs incurred in doing so (including in particular the cost of any labour, materials or postage).” Mr T has argued that the failure of the merchant to provide return packaging falls foul of this section. He has taken the view that the merchant not providing packaging caused him significant inconvenience. He also argues that the requirement of the merchant to bear the cost of materials covers packaging too. More recently he has referenced a decision by one of my colleagues, but I should explain each case is decided on its own facts and so I am not required to follow the decision in that case. He has also noted that other merchants do offer packaging in support of his arguments. Monzo did not consider that the law obliged the merchant to provide packaging and so it didn’t consider a claim under s.75 to be in order. That said it did not fully articulate this to Mr T and seems to have looked at chargeback and s.75 together. It is arguable that it could have made its position more clear and reassured Mr T that his claim had been given proper consideration. Looking at Monzo’s view of the legislation as it applied to Mr T’s circumstances I consider that to be a reasonable interpretation and not one that I can say is definitively wrong. While it might be good practice and it may be something other merchants offer the law does not specify that failure to provide packaging is a cause of significant inconvenience nor is it clear that ‘materials’ necessarily extends to packaging. The law is open to interpretation when applied to the facts of a particular situation and Monzo took what I consider to be a reasonable view and not one that I think should be reversed. On its current website the merchant states that it “will make every reasonable effort to assist you with your return”. It is arguable that it made a reasonable effort by sending Mr T a prepaid returns label. I appreciate Mr T takes a different view, but in my role as an ombudsman I cannot safely conclude that Monzo was wrong in its conclusion. I also note that the merchant was not obliged to accept the return of the goods given the length of time from the purchase date. However, it agreed to do so. I have noted the terms of

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its release document which Mr T refused to sign. I have some sympathy with his thoughts on this, but I understand the document was issued after Mr T had instigated legal proceedings which may have influenced the merchant’s approach. Nor do I think the outcome of his legal action has any nearing on the matter. It appears that the merchant did not choose to defend it which does not mean his view of the law was accepted by it. In his original complaint Mr T asked that Monzo be required to reinvestigate his claim. Given he has been refunded I do not consider that would be necessary. It reached a reasonable conclusion and on balance, one it was entitled to reach. My final decision My final decision is that I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr T to accept or reject my decision before 1 October 2025. Ivor Graham Ombudsman

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