- 34 per cent of Monzo fraud cases referred to FOS were overturned
- More than 1,000 complaints were wrongly rejected in one year
- Fraud accounted for 41 per cent of crime in England and Wales
Monzo wrongly denied refunds to more than 1,000 fraud and scam victims last year, according to figures from the Financial Ombudsman Service.
Data shows the digital bank was found to have made the wrong decision in 34 per cent of 3,372 fraud cases referred to the ombudsman. That is the highest proportion among major UK banks receiving large volumes of complaints.
Fraud cases include authorised push payment scams, where customers are tricked into transferring money, as well as chip and pin fraud and identity theft.
NatWest ranked second, with 33 per cent of 1,972 fraud complaints overturned by the ombudsman. HSBC followed closely, with 32 per cent of 2,535 cases found in favour of the customer.
There is often a delay between a fraud taking place, a customer complaining to their bank and the case being reviewed by the ombudsman. A Monzo spokesperson reportedly said some of the cases examined related to fraud incidents that happened more than two years ago.
The spokesperson added that the bank had continued investing in fraud prevention technology and claimed it prevented 2.9 times the value of fraud in 2025 compared with the previous year, as quoted in a news report.
Fraud on the rise, scrutiny intensifies
Fraud is now the most common crime in the UK, accounting for an estimated 41 per cent of all offences in England and Wales in the year ending September 2024.
Alex Neill, co-founder of Consumer Voice, said victims often experience added stress when challenging their bank’s decision, as quoted in a news report. She said people who have been scammed are not only out of pocket but frequently left feeling embarrassed and anxious, and argued that banks should ensure reimbursement is fair and consistent.
In 2024, the government introduced rules requiring banks to refund most victims of authorised push payment fraud who were manipulated into sending money to criminals.
Industry body UK Finance reported 185,733 APP fraud cases in 2024, down 20 per cent from 232,427 in 2023. Fraudsters stole £450.7m in total last year, while £267.1m was paid out in compensation.
A spokesperson for the Financial Ombudsman Service said it receives hundreds of scam-related complaints each week. They advised customers to first raise concerns with their bank before escalating the matter to the ombudsman’s free service, as quoted in a news report.
Growth and governance questions
Monzo, founded in 2015, has grown rapidly as part of the UK’s wave of challenger banks. It was valued at £4.5bn in October 2024 after employees sold shares to existing investors.
Under chief executive TS Anil, who is due to step down in February, Monzo trebled its customer base to more than 14 million. The bank reported a pre-tax profit of £60.5m for the year to March, with revenue of £1.2bn.
However, it has faced regulatory scrutiny. In 2024, the Financial Conduct Authority fined Monzo £21m for weaknesses in its financial crime controls, including allowing customers to register accounts using implausible addresses such as 10 Downing Street and Buckingham Palace.
NatWest said it works to resolve complaints directly with customers and has proactively contacted clients in historic cases to help clear the ombudsman’s backlog, as quoted in a news report. HSBC said it complies fully with reimbursement rules and refunded more than 13,000 scam claims last year, preventing over £130m from being lost, as quoted in a news report.
The ombudsman data only reflects cases that were formally escalated. Still, the figures may raise fresh questions about how consistently banks are handling fraud complaints at a time when scams remain widespread.
