Monzo Bank Limited · DRN-6052865

The complaint Miss L complains that Monzo Bank Limited trading as Monzo won’t reimburse her after she made payments towards a service that she now considers to have been a scam. What happened Miss L has explained that she enlisted the services of a firm I’ll refer to as ‘D’ to provide customer relationship management services. Miss L has explained that she initially made payments to D in May and June 2025 and received the expected services. However, she made two further payments in July 2025 totalling £2,598, after which D made excuses for not carrying out any agreed work, such as stating its account was blocked, ignoring contact attempts and eventually becoming unreachable. Believing she’d fallen victim to a scam, Miss L contacted her bank, Monzo, to raise a claim. There were issues with how Monzo handled Miss L’s claim and the claim was closed on several occasions without Miss L’s awareness. Monzo awarded £135 in compensation to Miss L for delays caused. However, Monzo has also stated that it considers this to be a civil matter between Miss L and D. Miss L remained unhappy and referred her complaint to our service. An Investigator considered the complaint but didn’t uphold it. She didn’t think there was sufficient evidence provided to demonstrate what services were agreed between Miss L and D, but that there was evidence that suggests a breakdown in their relationship. Given Miss L had received what she had paid for previously, she didn’t think the available evidence was sufficient to demonstrate that Miss L was the victim of a scam, rather than that this was a civil dispute between the two parties. Miss L disagreed with the Investigator’s view. She reiterated Monzo’s delays in handling her claim and the financial impact this had had on her. She also said that while earlier services were provided as agreed, D’s behaviour immediately changed after receiving subsequent payments which demonstrates clear dishonesty and evasion. As Miss L remained unhappy, the complaint has been referred 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’m sorry to hear of the situation Miss L has found herself in. She’s clearly paid a significant amount of money for services she doesn’t appear to have received. But my role is to determine whether Monzo is liable for any of these losses as a result of any reimbursement schemes or wrongdoing. It’s not in dispute that Miss L authorised these payments to D. And the starting position in law is that a firm is expected to process payments and withdrawals that a customer authorises, in accordance with the Payment Services Regulations and the terms and

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conditions of the customer’s account. However, where the customer made the payment as a consequence of the actions of a fraudster, it may sometimes be fair and reasonable for a firm to reimburse its customer even though they authorised the payment. From 7 October 2024, Payment Services Providers in the UK are bound by the Faster Payments Scheme (FPS) reimbursement rules. Under these rules, most victims of APP scams should be reimbursed. To decide whether Monzo should refund Miss L’s payments, I’ve therefore considered whether this issue meets the reimbursement rules’ definition of an APP scam: ‘Where a person uses a fraudulent or dishonest act or course of conduct to manipulate, deceive or persuade a consumer into transferring funds from the consumer’s relevant account to a relevant account not controlled by the consumer, where: • The recipient is not who the consumer intended to pay, or • The payment is not for the purpose the consumer intended’ Monzo has argued this matter is a private civil dispute rather than a scam. Such disputes – defined as ‘A dispute between a consumer and payee which is a private matter between them for resolution in the civil courts, rather than involving criminal fraud or dishonesty’ – aren’t covered by the reimbursement rules. I can certainly see why Miss L is aggrieved by the actions of the individual she paid, and I understand why she thinks she’s been scammed. But having carefully weighed up all the available evidence, I’m not persuaded it supports that it’s more likely than not that D intended to defraud Miss L from the outset. Miss L has explained she was using the services of D, and the payments she made were all to an account in D’s name, so I think it’s clear that Miss L paid who she intended. I’ve therefore thought about whether the evidence sufficiently demonstrates that the payment purposes didn’t align. Miss L has provided limited evidence to support her claim about D – while I’ve seen some screenshots following July payments, the evidence is relatively limited, with only some parts of the conversation provided. While I can see that at some point Miss L’s calls to D went unanswered, I can also see that D had said ‘I told you I will drop the CRM to you’. I’ve not seen any evidence to confirm what was actually agreed between Miss L and D to be provided, or what sort of timescales were arranged. To decide that someone acted with criminal intent, even on the balance of probabilities, is understandably a high bar to meet. Based on what Miss L has provided I can’t safely conclude that is what has happened here, as I can’t rule out other equally possible reasons for D becoming unable or unwilling to provide the services agreed to without more evidence to support this. In addition, I’ve considered information provided by the beneficiary account that received Miss L’s funds. While the account provider has provided our service with information – it has done so in confidence. It has provided that which is necessary for the determination of this complaint to allow us to discharge our investigatory functions. Due to data protection laws, our service can’t share any information about the beneficiaries, the receiving bank accounts or any investigation and action subsequently taken. However I would like to assure Miss L that I have thoroughly reviewed and considered all the information provided before reaching my decision.

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Having done so, I don’t think the account use supports an allegation that D set out with intent to defraud Miss L, based on the use of the account and lack of other claims raised against it. Therefore to conclude, based on the information provided about the recipient of Miss L’s payment it seems clear the payment went to the person Miss L intended to pay. And I don’t think it’s been shown, on balance, that there was a deception and mis-match regarding the payment purpose. It seems at least as likely that both Miss L and D intended the payment to be for agreed services, but that a conflict later arose. For these reasons I don’t think it was unfair for Monzo to reject this claim under the FPS reimbursement rules. Nor do I think there is any other reason why it should refund Miss L’s losses. Lastly, I’ve thought about the service Miss L received when raising a claim with Monzo. I agree that Monzo didn’t handle Miss L’s claim as it should have – and that this no doubt caused unnecessary delays and stress for Miss L. But I’m also mindful that even if Monzo had acted faster, I’ve ultimately determined that Monzo isn’t liable to reimburse her and therefore she has not financially suffered as a result of these delays. I therefore think the £135 already offered by Monzo is fair compensation to acknowledge the additional distress caused to Miss L. My final decision My final decision is that I don’t uphold Miss L’s complaint against Monzo Bank Limited trading as Monzo. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss L to accept or reject my decision before 26 May 2026. Kirsty Upton Ombudsman

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