Monzo Bank Ltd · DRN-6245536

The complaint Mr T complains that Monzo Bank Ltd won’t refund the money he lost to an investment scam. Mr T is represented in this complaint, but I’ll refer to him as it’s his complaint. What happened There is a lack of clarity on what happened. This is because Mr T’s dialogue with the scammer, who contacted and persuaded him to make the payments, has a significant gap (from 27 December 2024 to 26 January 2025) when most of the payments were made. Also, there are deletions in the dialogue and comments from Mr T indicate that he may possibly have made payments when he suspected a scam. The following is a summary of what appears to have happened: Mr T received a message app communication from Person K (the scammer) who made out she was trying to contact someone else, and they then exchanged friendly messages. Mr T discovered that she was a business analyst and was making large profits by trading in crypto. Mr T expressed an interest as he’d been looking to fund an important medical operation, to stop or reduce a painful health condition, and Person K offered to teach him how to make a profit to pay for this. She then persuaded him to invest an initial £1,000 and sent him an invitation to join a (fake) trading platform. After completing some online checks, which added authenticity, Mr T set up an account with the trading platform and two accounts with legitimate crypto companies (Company P and then Company C), in order to pay money into it. Mr T was led to believe that the trading platform had its own professional customer services team and that his profit was growing. After his first few payments, which totalled £2,010, he was able to withdraw £700, which encouraged him to make further payments. Mr T made the following payments from his Monzo account to Company P and then onto the scammers: Payment No. / Credit Date Payee Amount 1 30 December 2023 Mr T’s account with Company P £1,000 2 30 December 2023 Mr T’s account with Company P £1,000 3 1 January 2024 Mr T’s account with Company P £10 Credit 2 January 2024 £700.79 4 3 January 2024 Mr T’s account with Company P £3,000 5 3 January 2024 Mr T’s account with Company P £2,000 6 3 January 2024 Mr T’s account with Company P £2,000 7 19 January 2024 Mr T’s account with Company P £3,000

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8 19 January 2024 Mr T’s account with Company P £2,000 9 20 January 2024 Mr T’s account with Company P £2,200 10 10 February 2024 Mr T’s account with Company P £3,000 11 16 February 2024 Mr T’s account with Company P £3,000 12 16 February 2024 Mr T’s account with Company P £4,000 13 16 February 2024 Mr T’s account with Company P £3,000 14 16 February 2024 Mr T’s account with Company P £1,000 15 17 February 2024 Mr T’s account with Company P £5,200 16 18 February 2024 Mr T’s account with Company P £5,500 17 4 March 2024 Mr T’s account with Company P £5,200 18 4 March 2024 Mr T’s account with Company P £200 19 4 June 2024 Mr T’s account with Company C £0.10 20 4 June 2024 Mr T’s account with Company C £3,604.65 21 6 June 2024 Mr T’s account with Company C £514.95 £49,728.91 He attempted to make some payments, on 9 February 2024, from an account he had with a regulated financial firm (Firm W) but as they were blocked he transferred the fund to his Monzo account. When Mr T attempted to make a larger withdrawal from his account, having been led to believe he’d made USDT 128,000 (approximately GBP 90,000) he experienced issues and was informed that he had to pay additional fees for tax and to gain credit points. This caused him to pay more money into the fake investment. Despite paying the scammers fees, Mr T discovered he still couldn’t make a withdrawal and, when (the date isn’t clear) he couldn’t reach Person K and the customer services team, he realised he’d been scammed. In December 2024, Mr T submitted a complaint to Monzo requesting a refund as he considered the value, frequency and destination of the payments to have been unusual and believes enquiries, intervention and warnings would’ve prevented his financial loss. Monzo rejected his claim as they couldn’t see that they’d done anything wrong or that Mr T was entitled to a refund. So, Mr T brought his complaint to our service. Although our investigator considered that Monzo should’ve intervened on payment 4, she wasn’t persuaded any Monzo intervention would’ve prevented his loss. And she thought he would’ve found another way to pay the scam investment. This is because of evidence that Mr T had received warnings from another Firm W and tried to circumvent interventions and disguise payments going to Monzo, Mr T strongly disagrees that an intervention from Monzo wouldn’t have been effective and that he would’ve found an alternative way to make the payments. His points included the following: • The ‘gift’ payment reason (when he transferred funds from Firm W to Monzo) was ‘an accurate response to describe the journey of the funds’. • He did select ‘paying family and friends’ as the payment reason but as it was clear he was making multiple payments to Company P this reasoning didn’t match the

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destination of the payment which was a scam indicator. • His account (this appears to be Firm W) was ‘frozen after he received an incoming payment from his partner’. As a result, he ‘was forced to open an alternative bank account. From here, any payments back to Monzo were to restore his normal banking habits, not to bypass Wise’s intervention’. • This was also a missed opportunity from Monzo to protect him. As Mr T remains dissatisfied, his complaint has been passed to me to look at. I issued a provisional decision on 4 February 2026, and this is what I said: I’ve considered the relevant information about this complaint. My provisional decision is the same outcome as that reached by our investigator. However, as I’ve highlighted some issues with Mr T’s submissions, I’d like to give him a further opportunity to respond. The deadline for both parties to provide any further comments or evidence for me to consider is 18 February 2026. Unless the information changes my mind, my final decision is likely to be along the following lines. If I don’t hear from Mr T, or if they tell me they accept my provisional decision, I may arrange for the complaint to be closed as resolved without a final decision. What I’ve provisionally 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 done so, my provisional decision is not to uphold this complaint, and I’ll explain why. I should first say that: • Having reviewed Mr T’s submissions I’m satisfied that he was the victim of a cruel investment scam and I’m very sorry to hear about his financial loss and the distress caused. • In making my findings, I must consider the evidence that is available to me and where evidence is incomplete, inconsistent or contradictory, as some of it is here, I must reach my decision on the balance of probabilities – in other words, what I consider most likely to have happened in light of the available evidence and wider circumstances. • Although a voluntary code existed to provide additional protection against some scams (the Contingent Reimbursement Model Code – CRM Code) and Monzo adhered to the principles of the code, the payments here were made to accounts in Mr T’s name for crypto so unfortunately, they’re not covered under this code. • The Payment Services Regulations 2017 (PSR) and Consumer Duty are relevant here. PSR Under the PSR and in accordance with general banking terms and conditions, banks should execute an authorised payment instruction without undue delay. The starting position is that liability for an authorised payment rests

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with the payer, even where they are duped into making that payment. There’s no dispute that Mr T made the payments here, so they are considered authorised. However, in accordance with the law, regulations and good industry practice, a bank should be on the look-out for and protect its customers against the risk of fraud and scams so far as is reasonably possible. If it fails to act on information which ought reasonably to alert a prudent banker to potential fraud or financial crime, it might be liable for losses incurred by its customer as a result. Banks do have to strike a balance between the extent to which they intervene in payments to try and prevent fraud and/or financial harm, against the risk of unnecessarily inconveniencing or delaying legitimate transactions. So, I consider Monzo should fairly and reasonably: o Have been monitoring accounts and any payments made or received to counter various risks such as anti-money laundering and preventing fraud and scams. o Have 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. o 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 declined to make a payment altogether, to help protect customers from the possibility of financial harm from fraud. Consumer Duty Also, from July 2023 Monzo had to comply with the Financial Conduct Authority’s (FCA’s) Consumer Duty which required financial services firms to act to deliver good outcomes for their customers. Whilst the Consumer Duty does not mean that customers will always be protected from bad outcomes, Monzo was required to act to avoid foreseeable harm by, for example, operating adequate systems to detect and prevent fraud. Also, Monzo had to look out for signs of vulnerability. With the above PSR and Consumer Duty in mind and noting Monzo’s comment that: • ‘I do think we had a few opportunities to intervene here and we didn’t’ which appears to be an acceptance that interventions should’ve taken place, I looked closely at all the payments and Mr T’s statements to consider when Monzo should’ve recognised Mr T was at risk of financial harm and, if so, how they should’ve given relevant educational information, warnings and probed to detect any possible fraud or scam. Although crypto payments are common and legal, Monzo would’ve known that they present an elevated risk and Mr T hadn’t made any previous payments to well-known crypto exchange companies. Also, that £3,000 and £5,000 in five days were large amounts for Mr T to spend. So, I’m in agreement with our investigator, that at payment 4 they should’ve intervened. And, before releasing this payment, I would’ve expected a proportionate intervention to have been a strong automated warning which would’ve included information and advice about crypto investments. Then, if Mr T continued to make payments, at the point of payment 6 (which I look at below), where he was making three crypto payments in one day for £7,000, and over

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£9,000 in five days, I would’ve expected Monzo to have put in place a stronger human intervention. This would involve a skilled fraud and scam agent asking probing questions to then give education, that would bring crypto scams to life, warnings and detect any possible fraud or scam. If such education and warnings on an intervention at payment 6 didn’t resonate with Mr T or cause an agent to be suspicious, I would’ve expected a further human intervention on payment 13 when Mr T attempted to pay £10,000 in several same day payments. And again, on payment 16, where Mr T was attempting to pay £20,000 in three days. Also, at this point Monzo would’ve seen large credits going into Mr T’s account prior to the payments, which they recognised as being unusual as they questioned him on one of these. So, having looked at the payments, I think Monzo should’ve put an automated intervention in place at payment 4 and human interventions at payments 6, 13 and 16. I then considered what would’ve more likely than not happened had these interventions occurred. Mr T indicates that the scammers didn’t persuade or coach him to be untruthful to Firm W or Monzo in order to avoid payments being blocked. However, on balance of probabilities, I think he either did receive some coaching or didn’t want Firm W or Monzo to know what he was doing. I say this because: A. Mr T accepts that he gave Firm W incorrect information saying his payments were for friends and family when they weren’t. B. He hasn’t provided any evidence that the credits he received were gifts and when he transferred funds between his Firm W and Monzo accounts these were ‘me to me’ payments and the purpose was for an investment and not a gift. C. Mr T has provided dialogue with deleted messages between him and Person K and, regarding the missing messages, there is an inconsistency in his explanation as he says he switched contact to telephone but also says they ‘were lost in the process of attempting to export the conversation’. D. When making payments the same day he broke these down into small amounts. E. Mr T appears to have been instructed to make payments through two banks. F. When Monzo asked him a question about the source of his funds he said he was purchasing bitcoin for a good price, when he was doing more than this. So, I think Mr T provided Firm W and Monzo with misleading information to circumvent intervention and he would’ve more likely than not have continued to do so. Also, he appears to be withholding information and the source of some of his funds is unclear. Mr T hasn’t explained his reason for giving Firm W incorrect information when they asked him to give payment reasons, which negated their fraud prevention system. Also, he appears to have given other misleading information and if the full dialogue with Person K was available this may possibly explain the reason and show Person K using persuasion and coaching tactics and giving a cover story. Without the full dialogue, I’m unable to understand how any intervention – including a human intervention – could’ve counteracted this. In addition, the dialogue shows Mr T confronting and swearing at Person K in late February 2025, prior to making payment 17. This hasn’t been explained and suggests Mr T may possibly have suspected he was being scammed at an earlier point before deciding to make further payments.

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So, as I think Mr T was misleading his banks, disregarding (Firm W’s) general scam warnings and probably under a scammer’s spell, perhaps being coached and led to believe he could risk losing life changing profits, I can’t be confident that he wouldn’t have also disregarded automated warnings and advice from Monzo, if they’d put them in place. Regarding human interventions, if they’d occurred on payments 6,13 and 16, due to the above, I’m currently not persuaded that Mr T would’ve listened to educational information and would’ve been truthful to probing questions revealing the real reasons for his payments. I think it more likely than not that he would’ve said he was purchasing bitcoin for a good price, could make withdrawals and accepted the risk. And I can’t be confident that a Monzo agent would’ve had a reason to be suspicious and been able to detect a scam. Also, even if a Monzo agent was suspicious and blocked the payment, I’m not persuaded their suspicion would’ve been strong enough to restrict his account for any length of time and Mr T wouldn’t have found another way to make the payments. Based on the current information on file, although I empathise with Mr T and agree that Monzo failed to do analysis and put in place interventions, I’m not persuaded that they would’ve been able to unravel the scam. So, I’m sorry to disappoint Mr T but I currently don’t think it would be fair or reasonable to ask Monzo to provide Mr T with a refund here. My provisional decision For the reasons mentioned above, my provisional decision is not to uphold this complaint against Monzo Bank Ltd. This is subject to any comments that either Mr T or Monzo Bank Ltd may wish to make. These must be received by 18 February 2026. 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. Further to my above provisional decision, I didn’t receive a response from Monzo. But, after requesting additional time, Mr T made a further submission. This repeated some previous points and included the following comments: • He disagreed that interventions wouldn’t have prevented his financial loss and stated that he would’ve been receptive and honest had Monzo intervened. • He says the scammers didn't persuade or coach him to be untruthful to avoid payments being blocked. • He says ‘although the provisional decision refers to gaps in the dialogue with the scammer, there is no evidence before the Ombudsman to suggest that Mr T was specifically coached to lie to his banks’. • Regarding the weight the provisional decision gives to Mr T's describing the funds he transferred back from Firm W to Monzo as ‘gifts’ (after Firm W closed his account), Mr T says: o The ‘gift’ labelling, when transferring funds back to his Monzo account from his Firm W account, was accurate and not misleading. He explains that he opened the Firm W account because Monzo restricted his account and the

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money received into his accounts came from his partner and family member to support him. So, describing these transfers as ‘gifts’ accurately reflects the nature of the funds that had been provided to him. o An adverse inference shouldn’t be drawn from Mr T's use of multiple banks to make payments as he only opened the Firm W account because Monzo temporarily restricted his account. And he wasn’t advised by anyone to make payments through two banks to circumvent fraud prevention measures. • Regarding Monzo’s question about the source of his funds, where he stated that he was purchasing bitcoin, Mr T says this response demonstrates his willingness to be honest with his bank about the nature of his transactions. I looked at everything again and considered the above points and deliberated on what would’ve more likely than not happened had Monzo put in place the above mentioned automated and human interventions. Having done so, I’m sorry to disappoint Mr T but I’m still not persuaded that Monzo would’ve been able to prevent him from making the payments. I say this because the dialogue with the scammers is important as Mr T’s actions, to give Firm W incorrect reasons and information for attempted payments and then ignore their scam education and fraud warnings, remain unexplained. The deletions, gaps and inconsistent explanations from Mr T make it difficult to know how an automated intervention from Monzo would’ve been any different to Firm W’s (him giving them false information) and effective. Also, how one of their fraud and scam agents, who importantly wouldn’t be sighted on the payment destination and risk level, could’ve gained enough information from Mr T to break the scammers’ spell, unravel the scam and stop him making the payments (through detection, warnings and education). Furthermore, as mentioned in my provisional decision, the dialogue shows Mr T confronting and swearing at Person K in late February 2025, prior to making payment 17. This still hasn’t been explained and suggests Mr T may possibly have suspected he was being scammed at an earlier point but, due to the possibility of lucrative profits, he didn’t want to stop (or risk being stopped) making further payments. Regarding the money Mr T received and sent to the scammers (from Firm W), although I understand his ‘gift’ labelling explanation, this money had already been received and was being transferred to Monzo for the purpose of his investment. Although I didn’t put significant weight on this point, I think the word ‘investment’ would’ve been the logical descriptor. Considering there isn’t any evidence this was a gift, Mr T doesn’t deny he told Firm W he was sending money to friends and family and that he hadn’t received any unexpected contact, both of which were false, on balance, I think it likely that he was continuing to disguise the payments to avoid an intervention. Mr T was under the spell of the scammers, and their cunning tactics led him to believe he was gaining from a lucrative investment opportunity. So, if he wasn’t coached, this seems likely to have been his motive for trying to use Firm W, misleading them and continuing to make payments – with them and then Monzo – even when they repeatedly told him ‘this sounds like a scam’ and signposted him to scam education. I in no way blame Mr T for being under the spell of the cruel scammers and as a result disguising his payments, misleading Firm W and ignoring their warnings. And I genuinely empathise with his situation and appreciate him saying he would’ve been receptive and honest about what he was doing with cryptocurrency. But, for the reasons mentioned above – and in my provisional decision – even though I think Monzo should’ve intervened, I’m not persuaded he would’ve been straight with Monzo enabling them to protect him from financial harm.

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So, I’m sorry to disappoint Mr T but having given him a further opportunity to provide evidence and explanations, I’m not upholding this complaint against Monzo. My final decision For the reasons mentioned above, my final decision is that I’m not upholding this complaint against Monzo Bank Ltd. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr T to accept or reject my decision before 20 April 2026. Paul Douglas Ombudsman

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