Monzo has wrongly rejected refund claims from thousands of fraud and scam victims, according to data from the Financial Ombudsman Service.
The UK-based digital bank incorrectly denied more than 1,000 fraud and scam complaints closed in 2024, based on ombudsman rulings. The Financial Ombudsman Service determined Monzo made incorrect decisions in 34% of 3,372 cases referred for review, the highest rate among British banks receiving the most complaints.
NatWest ranked second with 33% of 1,972 fraud complaints wrongly rejected, followed by HSBC at 32% of 2,535 complaints. Fraud and scam complaints encompass authorised push payment (APP) scams, chip and PIN fraud, and identity theft.
Reimbursement framework under mandatory rules
The UK government introduced regulations in 2024 requiring banks to refund most victims of APP fraud, where customers are manipulated into transferring money to criminals. UK Finance reported 185,733 APP cases in 2024, down 20% from 232,427 in 2023. Fraudsters obtained GBP 450.7 million from victims in 2024, with GBP 267.1 million paid in compensation.
A lag exists between fraud occurrence, customer complaints to banks, and the Financial Ombudsman Service's processing of escalated cases. Monzo stated some cases relate to fraud occurring more than two years prior. The bank reported preventing 2.9 times the value of fraud in 2025 compared to the previous year through technology investments.
Fraud represents approximately 41% of all offences in England and Wales for the year ending September 2024, according to official statistics. The Financial Ombudsman Service receives hundreds of fraud and scam cases weekly from victims.
Regulatory compliance and operational context
Monzo received a GBP 21 million fine from the Financial Conduct Authority in 2024 for weak financial crime controls. The regulator found the bank allowed customers to register 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. Under Anil's leadership, Monzo increased its customer base to more than 14 million and reported GBP 60.5 million in pre-tax profit for the year ending March 2024, with revenue of GBP 1.2 billion.
The bank launched in 2015 alongside challenger banks including Revolut and Starling, obtaining a UK banking licence in 2016.
NatWest stated it prioritises complaint resolution and proactively contacts customers in historic cases to assist the ombudsman with backlog clearing. HSBC reported refunding over 13,000 scam claims and preventing over GBP 130 million in fraud losses in 2024.
