Monzo Bank Ltd · DRN-6174690

The complaint Mr M complains that Monzo Bank Ltd has refused to refund the money he lost as the result of a scam. What happened The background to this complaint is well known to all parties, so I won’t repeat it in detail here. In summary, Mr M says that in late 2021, he was contacted on Telegram by individuals who claimed to be involved in cryptocurrency investing. He was persuaded to make payments from his Monzo account to three cryptocurrency platforms. Mr M says he was given access to a trading platform and he was satisfied that the investment opportunity was legitimate. Mr M says the scammers continued to contact him through WhatsApp and Telegram and told him which cryptocurrency platforms to use and how to transfer the cryptocurrency on from the platforms. Mr M says he realised that he had been scammed when he was unable to withdraw his profits and he was asked to pay more to release his money. Mr M made the following payments from his Monzo account: No date time Cryptocurrency platform method amount 1 25.9.21 10.35 Platform 1 Card payment £219.66 2 6.10.21 12.43 Platform 1 Card payment £1,548.97 3 11.10.21 08.38 Platform 1 Card payment £2,002.26 4 15.10.21 00.03 Platform 1 Card payment £1,000 5 19.10.21 08.12 Platform 1 Card payment £572.50 6 26.11.21 14.51 Platform 2 Card payment £388.53 7 26.11.21 20.01 Platform 3 Card payment £94.00 8 26.11.21 20.48 Platform 2 Card payment £96.62 9 27.11.21 06.40 Platform 3 Card payment £6.00 10 30.11.21 10.34 Platform 2 Card payment £656.25

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11 30.11.21 11.49 Platform 3 Card payment £40.00 12 30.11.21 12.02 Platform 2 Card payment £6.00 13 3.12.21 n/a Platform 2 Faster payment £250.00 14 3.12.21 21.04 Platform 3 Card payment £24.00 15 11.12.21 n/a Platform 2 Faster payment £90.00 16 12.12.21 17.20 Platform 3 Card payment £50.00 17 12.12.21 n/a Platform 2 Faster payment £265.00 18 14.12.21 n/a Platform 2 Faster payment £378.38 19 15.01.22 01.58 Platform 3 Card payment £50.00 Mr M complained to Monzo in late 2025. Monzo did not uphold Mr M’s complaint. It said Mr M had authorised the payments and it didn’t think it needed to refund the money he said he had lost. Our investigator said there was evidence to show that Mr M had been scammed, but wasn’t satisfied there was sufficient evidence of the loss incurred. In particular they said that the information provided did not show payments being made from all the cryptocurrency wallets, so it was not possible to establish if all the cryptocurrency had been transferred on to a third party. They also noted Mr M had not provided this service with a copy of the WhatsApp and Telegram chat history for the period when the payments were made, so it was not possible to see how the scam had developed. Mr M provided more information in response to our investigator’s view. Our investigator acknowledged the information Mr M had provided but said it did not change their view. They said they would not have expected Monzo to have been concerned about the payments Mr M made to the cryptocurrency platforms, so would not have expected it to intervene before processing the payments. Mr M did not accept our investigator’s view. His complaint was then passed to me to be determined. I issued a provisional decision on this complaint on 10 March 2026. In the provisional decision I explained that I had reached the same view as our investigator, but for different reasons. I explained my provisional decision as follows. I said it was not in dispute that Mr M had fallen victim to a cruel scam. What was in dispute was whether Monzo should refund some, or all, of the money Mr M said he lost to this scam. In deciding what’s fair and reasonable in all the circumstances of a complaint, I explained that I am required to take into account relevant: law and regulations; regulators’ rules; guidance and standards; codes of practice; and where appropriate, what I consider to have been good industry practice at the time.

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I explained that in broad terms, the starting position at law is that a bank is expected to process payments and withdrawals that a customer authorises it to make, in accordance with the Payment Services Regulations (PSRs) and the terms and conditions of the customer’s account. And I said I had taken that into account when deciding what’s fair and reasonable in this case. However, taking into account the law, regulator’s rules and guidance, relevant codes of practice and what I consider having been good industry practice at the time, I said I considered Monzo should fairly and reasonably: - Have been monitoring accounts and any payments made or received to counter various risks, including anti-money laundering, countering the financing of terrorism, and preventing fraud and scams. - Have had 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). This is particularly so given the increase in sophisticated fraud and scams in recent years, which banks are generally more familiar with than the average customer. - In some circumstances, irrespective of the payment channel used, have taken additional steps, or made additional checks, before processing a payment, or in some cases decline to make a payment altogether, to help protect customers from the possibility of financial harm from fraud. In this case, I said I needed to decide whether Monzo acted fairly and reasonably in its dealings with Mr M when he authorised payments from his account, or whether it could and should have done more before processing the payments. Having carefully considered this matter I said I wouldn’t have expected the payments Mr M made to have triggered Monzo’s fraud prevention system, prompting it to intervene. I said this because, based on the information Monzo held about the way Mr M used his account the transactions did not appear to be particularly out-of-line. In particular, I said I was mindful that Mr M had previously made payments and transfers of similar and higher values from his account, so the payments did not look out-of-line with his usual pattern of transactions. For example, between mid-July 2021 and late September 2021 Mr M made five payments to third parties for values between £2,500 and £600 from his Monzo account. I noted that the payments made in connection with this scam were made to three different cryptocurrency platforms over a period of nearly four months and the value of the payments did not increase; an increase in the value of the payments is often the hallmark of a scam. Only five of the payments were for over £400, the largest payment was for £2,002.26 and nine of the payments were for under £100. In view of this I said I didn’t think Monzo would have identified a pattern that would have suggested Mr M might be falling victim to a scam. I said I was also mindful that, from the information Mr M had provided, it appears he contacted cryptocurrency platform 1 on 19 November 2021 as he was concerned he had been scammed. The cryptocurrency platform replied to say it had already transferred the cryptocurrency and it said: We would encourage you to report this crime to your bank and local authorities. We would be more than happy to help with their investigations. I noted that Mr M did not contact Monzo to say he was concerned he was being scammed in

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November 2021. Mr M then made a further 14 payments that he says were sent on to the scammers after he contacted the first cryptocurrency platform to say he was concerned he was being scammed. I asked Mr M why he hadn’t contacted Monzo at the time. He said he asked the scammers about the message he had received from the cryptocurrency platform and that he was considering reporting the issue to Monzo. Mr M said the scammers ‘… strongly discouraged me from doing so and warned me that reporting the transactions could cause my account and funds to be frozen and that I could permanently lose the money already invested.’ Mr M said he was then instructed to use other cryptocurrency platforms to send cryptocurrency on to the scammers. Mr M said: Because I had already invested a significant amount of money and believed I might lose everything if I stopped, I followed their instructions and made further payments through these other platforms. Mr M acknowledged that, with hindsight he should not have accepted the ‘false assurances’ from the scammers and should have reported the matter to Monzo at that time. I said I was sympathetic to Mr M’s position, but I must take into account that when he contacted the cryptocurrency platform on 19 November 2021, he was clearly concerned that he was being scammed. Unfortunately Mr M did not provided this service with a screen shot of the full message he sent to the cryptocurrency platform, but based on the first part of the message, that had been provided; ‘may I know if someone scam me using [name of cryptocurrency platform] and I paid them any amounts using …’ and the cryptocurrency platform’s response, I said I thought Mr M had legitimate concerns that he had fallen victim to a scam. I said it was very unfortunate that the scammers were apparently able to persuade Mr M not to report the matter to Monzo. While I appreciated Mr M wasn’t an experienced investor, I said I would still have expected him to have been alarmed at being told ‘…reporting the transactions could cause my account and funds to be frozen and that I could permanently lose the money already invested’ and to have pursued this more robustly before sending more money to the scammers. I said I thought it was highly implausible that any legitimate investment platform would tell a customer not to report a concern that they were the victim of a scam to their bank. And I said I thought being told not to report the matter ought reasonably to have given Mr M serious cause for concern. As Mr M then chose to follow the scammers instructions and sent money via different cryptocurrency platforms, I said I didn’t think that, even if Monzo had intervened with a tailored warning, it would have prevented Mr M from sending more money. He was clearly being very heavily influenced by the scammers – to the extent he was willing to override his concerns that he was being scammed and accept a highly implausible explanation from the scammers that if he reported to Monzo that he was concerned he might have been scammed his account could be frozen and he could permanently lose the money he had invested. I said I didn’t think it was reasonable to accept this as an explanation a legitimate business would give and I thought it showed the extent to which Mr M was under the spell of the scammers. I said it was very unfortunate that Mr M had not been able to provide a copy of the messages

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he had with the scammers at the time he was sending the money, so it was not possible for me to know exactly what the scammers told Mr M. But from Mr M’s account of events, I said I was satisfied that even if Monzo had provided a tailored warning it would not have prevented Mr M from continuing to send money to the scammers. I said I was sorry Mr M had been the victim of a cruel scam. But having carefully considered all the information and evidence provided, my provisional decision was that I couldn’t reasonably require Monzo to repay the money Mr M said he lost in the scam as I didn’t think it had acted incorrectly in this matter. Mr M did not accept my provisional decision. He said, in summary, that he accepted he had contacted cryptocurrency platform 1 on 19 November 2021, because he was concerned he was being scammed, and the scammers had; ‘…strongly discouraged me from reporting the matter and reassured me that the issue was only temporary. They convinced me that reporting the transactions could result in my account being frozen and that I would permanently lose the funds already invested’. Mr M said he had several conversations with the scammers at the time and they persuaded him that the problem related to the cryptocurrency platform. Mr M says the scammers told him to stop using that platform and to use different cryptocurrency platforms to send the money to them. Mr M said: At the time, I believed that following their instructions was the only way to recover the money I had already invested. Mr M also said he felt that a warning or intervention by Monzo might have prompted him to ‘…reconsider the situation or seek advice before making further payments’. 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. As I set out in my provisional decision, I am sympathetic to Mr M’s position, but I can only require Monzo to reimburse some (or all) of the money Mr M has lost to this scam if, based on the information available, I am satisfied that it acted incorrectly. Having very carefully considered the circumstances of this complaint I remain of the view that I wouldn’t have expected the payments Mr M made to have triggered Monzo’s fraud prevention system, prompting it to intervene. As I set out in my provisional decision, I reached this view as, based on the information Monzo held about the way Mr M used his account, the transactions did not appear to be particularly out-of-line. In particular, Mr M had previously made payments and transfers of similar and higher values from his account, so the payments did not look out-of-line with his usual pattern of transactions. For example, between mid-July 2021 and late September 2021 Mr M made five payments to third parties for values between £2,500 and £600 from his Monzo account. I am also mindful that the payments made in connection with this scam were made to three different cryptocurrency platforms over a period of nearly four months and the value of the payments did not increase; an increase in the value of the payments is often the hallmark of a scam. Only five of the payments Mr M made in connection with this scam were for over £400, the largest payment was for £2,002.26 and nine of the payments were for under £100. In view of

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this I remain of the view that I don’t think Monzo would have identified a pattern that would have suggested Mr M might be falling victim to a scam. And - as I set out in my provisional decision - even if I was of the view that Monzo should have provided a tailored warning I cannot safely find that a tailored warning by Monzo would have broken the hold the scammers had over Mr M. I have reached this view as even after Mr M had proactively contacted cryptocurrency platform 1, with concerns he was being scammed, he was apparently persuaded by the scammers not to report the matter to Monzo and was instead persuaded to move to other cryptocurrency platforms to send funds on. As Mr M has acknowledged, ‘At the time, I believed that following their instructions was the only way to recover the money I had already invested.’ I think this illustrates the hold the scammers had over Mr M. And I don’t think a tailored intervention by Monzo would have broken this hold. I am sorry Mr M has been the victim of a cruel scam. But having carefully considered all the information and evidence provided, my decision is that I cannot reasonably require Monzo to repay the money Mr M says he lost in the scam as I don’t think it acted incorrectly in this matter. Recovery of funds I’ve also considered whether Monzo took appropriate steps to recover Mr M’s money once it was aware that the payments were the result of fraud. As I understand it, the faster payments were sent to an account under Mr M’s control. If there was any money in this account Mr M could have withdrawn it, so I don’t think Monzo needed to do anything. Once the money had been exchanged for cryptocurrency and transferred on, it would not have been possible for Monzo to recover this money. With regard to the payments Mr M made by debit card, as Mr M did not report the scam to Monzo for nearly four years it would not have been possible for it to raise a chargeback as the deadline for raising a chargeback had passed. But even if this was not the case, there isn’t a valid chargeback category that Monzo could have used for the payments Mr M made as he authorised the payments. The chargeback category that applies to fraudulent payments is only for payments that weren’t authorised by the customer, which isn’t the case here. My final decision My decision is that, for the reasons I have set out above, I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr M to accept or reject my decision before 28 April 2026. Suzannah Stuart Ombudsman

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