Monzo Bank Ltd · DRN-6168218

The complaint Mr P complains that Monzo Bank Ltd won’t refund the money he lost as the result of a scam. What happened The background to this complaint is well known to the parties, so I’ll simply summarise it here. In December 2025 Mr P bought an item on an online marketplace for £280. Mr P sent the money by faster payment from his Monzo account to the seller. But the money was returned to Mr P’s account. The seller told him that this was due to a “technical issue”. Mr P has explained that the refund created a false sense of legitimacy and feeling of trust. He says that the seller then pressured him to send the money through his account at an online payment platform, and to select “friends and family” as the payment type. He went ahead and paid £280 from his Monzo account into his account at the online payment platform using his debit card, and then sent the money on to the seller, selecting “friends and family” as instructed by the seller. Unfortunately, Mr P says that when he received the item, he discovered that it was fake. He raised a scam claim with Monzo. But Monzo declined to refund the money. It said the loss had occurred when he sent the money to the scammer from the online payment platform. Unhappy with Monzo’s response, Mr P brought his complaint to this service. Mr P has told us that the experience caused him significant stress and upset. One of our investigators considered the complaint, but didn’t think it should be upheld. In summary, he didn’t think that Monzo could have been expected to realise that Mr P risked being a victim of fraud when he made the payment. And he didn’t think it could have recovered the money. Mr P disagreed with the investigator’s view, so the complaint’s been passed to me for a final decision. 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. I was sorry to learn that Mr P was cheated out of his money. I can understand how upsetting this would have been, and I have sympathy for him. My role here is to decide whether I can fairly hold Monzo, which wasn’t itself involved in the scam, responsible for his loss.

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Mr P has referred to the APP reimbursement rules. But the Payment Systems Regulator’s scam reimbursement rules, introduced in October 2024, only apply to authorised “push” payments to accounts which aren’t under the control of the payer. In this case, the payment from Mr P’s Monzo account was to an account in his own name, and was made by debit card, which isn’t a form of push payment. This means the reimbursement rules don’t apply in this case. Mr P has asserted that the payment was “an integral step in a single, continuous APP fraud”. I acknowledge that he made the payment from his Monzo account with a view to then sending it on from his account at the payment platform. I also acknowledge that he made both payments under the same mistaken impression - that the seller was selling him a genuine item. But while the end purpose (the purchase of the item) might have been the same, the payments were two separate transactions. I acknowledge that Mr P has pointed out that if the original faster payment from his Monzo account hadn’t been refunded, the loss would have arisen from an automatic push payment made from his Monzo account. I understand Mr P’s point, and his frustration, and I acknowledge that he says he felt manipulated by the scammer into the change in payment method. But I need to base my decision on what did happen, rather than what might have happened in different circumstances. I’m satisfied that the payment was authorised. Mr P authenticated the payment using 3D Secure, and knew he was sending money to his own account at the payment platform. So even though he didn’t intend the money to end up with a scammer, the payment was ‘authorised’ under the Payment Services Regulations. Monzo had an obligation to follow the payment instructions it received, and Mr P is presumed liable for his loss in the first instance. But the matter doesn’t end there. In deciding what’s fair and reasonable, I’m required to take into account relevant law and regulations, regulators’ rules, guidance, standards and codes of practice and, where appropriate, what I consider to have been good industry practice at the time. Taking those things into account, I think that at the time the payments were made, Monzo should have been doing the following to help protect its customers from the possibility of financial harm: • monitoring accounts and payments to counter various risks, including fraud and scams; • keeping systems in place to look out for unusual transactions or other signs that might indicate that its customers were at risk of fraud (among other things) – especially given the increase in sophisticated fraud and scams in recent years, with which financial institutions are generally more familiar than the average customer; • acting to avoid causing foreseeable harm to customers, for example by maintaining adequate systems to detect and prevent scams and by ensuring that all aspects of its products, including the contractual terms, enabled it to do so; • in some circumstances, regardless of the payment method used, taking additional steps, or making additional checks, before processing a payment, or, where appropriate, declining to make a payment altogether; and • being mindful of - among other things – common scam scenarios, how fraudulent practices were evolving (including, for example, the common use of multi-stage fraud by scammers) and the different risks these can present to consumers when deciding whether to intervene.

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In this case, Mr P’s loss didn’t arise directly from the payment he made from his Monzo account. The loss, as Monzo has pointed out, occurred at a later stage. But even so, there might have been factors which I’d have considered should have prompted Monzo to take a closer look at the payment. There’s a balance to be struck. Banks have obligations to be alert to fraud and scams and to act in their customers’ best interests, but they can’t reasonably be involved in every transaction. I think it was reasonable of Monzo to consider a range of factors when deciding whether to take any additional steps before making the payment. I’ve looked at Mr P’s account statements. I realise that £280 isn’t an insignificant amount of money. But I don’t consider that it was such a large sum, either in itself, or when compared with other payments, Mr P had made from the account in the months leading up to the payment, that Monzo ought to have been concerned about it based on its size alone. The payment was going to an account in Mr P’s own name at a regulated payment platform. Mr P has commented that the fact that the payment was refunded and he then sent the same amount to his account at the payment platform should, in itself, have caused Monzo concern. I’ve thought about this, but the initial refund could have been made for a number of reasons. The subsequent payment to his account at the payment platform was for the same amount. But Monzo wouldn’t have known whether Mr P intended to send it on to the same person that he’d initially transferred the money to. And there was, in any event, a number of possible explanations for the change in payment method. Overall, I’m not persuaded that there was anything which should have prompted Monzo to take a closer look at the payment or to intervene before processing it. I’ve thought about whether Monzo could have done more to recover Mr P’s money. As he made the payment by debit card, the chargeback scheme was potentially relevant here. But I don’t think a chargeback claim would have had any prospect of success. Mr P made the payment to an account in his own name at the payment platform, which then provided the service of sending the money to the seller. I’m sorry to disappoint Mr P. I realise that this won’t be the outcome he was hoping for, and I sympathise with him. But having thought carefully about the evidence and submissions provided by both parties, I don’t find that I can fairly uphold this complaint. My final decision My decision is that I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr P to accept or reject my decision before 20 April 2026. Juliet Collins Ombudsman

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