Monzo has incorrectly dismissed refund claims from numerous fraud and scam victims, according to records from the Financial Ombudsman Service.
The UK-based digital bank denied more than 1,000 fraud and scam complaints in 2024, as determined by ombudsman rulings. The Financial Ombudsman Service found that Monzo made incorrect decisions in 34% of the 3,372 cases reviewed, marking the highest rate among British banks receiving a significant number of such complaints.
NatWest ranked second with 33% of 1,972 fraud claims wrongly rejected, followed by HSBC at 32% of 2,535 complaints. These complaints cover various fraudulent activities including authorized push payments (APP) scams, chip and PIN fraud, and identity theft.
Reimbursement framework under mandatory rules
The UK government mandated that banks must refund most victims of APP fraud in 2024, where customers are tricked into transferring money to criminals. According to UK Finance, there were 185,733 APP cases in 2024, a decrease of 20% from the 232,427 recorded in 2023. Fraudsters obtained GBP 450.7 million from victims, with GBP 267.1 million paid as compensation.
A delay exists between when fraud occurs, customers file complaints with their banks, and the Financial Ombudsman Service processes escalated cases. Monzo noted that some disputes relate to incidents more than two years old. The bank reported preventing 2.9 times the value of fraud in 2025 compared to the previous year through technology investments.
Fraud constitutes approximately 41% of all offenses in England and Wales for the period ending September 2024, as per official statistics. The Financial Ombudsman Service receives a high volume of fraud and scam cases weekly from victims.
Regulatory compliance and operational context
In 2024, Monzo was fined GBP 21 million by the Financial Conduct Authority for weak financial crime controls. The regulator identified that customers were able to open accounts with implausible addresses, including government buildings and the bank’s own headquarters.
Monzo announced in late 2024 that CEO TS Anil would step down in February 2026 after nearly six years, to be replaced by Diana Layfield, a former Google executive. During Anil’s tenure, Monzo grew its customer base to over 14 million and reported pre-tax profits of GBP 60.5 million for the year ending March 2024, with revenues reaching GBP 1.2 billion.
The bank commenced operations in 2015 alongside other challenger banks like Revolut and Starling and obtained a UK banking license in 2016.
NatWest emphasizes proactive resolution of complaints by contacting customers in historical cases to support the ombudsman’s backlog clearance efforts. HSBC reported refunding over 13,000 scam claims and preventing over GBP 130 million in fraud losses in 2024.
