Monzo Bank Limited · DRN-6227481

The complaint The E complains that MONZO BANK LIMITED (‘Monzo’) registered a Cifas marker against him without due cause. What happened The circumstances of this complaint are well known to both parties, so I will not go into every detail of what happened here. But, in summary, Mr E received funds into his account which were later reported as fraudulent. Monzo reviewed his account and contacted Mr E to ask about the incoming funds. Unsatisfied with his response, it closed Mr E’s account and referred him to Cifas who recorded a marker against him for ‘misuse of facility’. Mr E complained to Monzo, who declined to uphold his complaint. It said that it had met the criteria for referring him to Cifas, and it said it followed its processes correctly with regard to account closure and responding to his complaint. Mr E remained dissatisfied, so he escalated his concerns to our service where one of our investigators looked into what had happened. They did not recommend Mr E’s complaint should be upheld. In summary, they agreed that Monzo had met the evidential threshold to refer Mr E to Cifas, and thought it had acted in line with its processes when it closed Mr E’s account. They also said they could not find any errors in relation to the length of time Monzo took to investigate this matter. Mr E did not agree, so the case has been passed to me to decide. 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. Having done so, I have reached the same overall conclusion as our investigator, and for broadly the same reasons. I will explain why. Did Monzo fairly escalate their concerns about Mr E to Cifas? Monzo, as Cifas members, are obligated to share the details of customers who it has reasonable grounds to believe have been involved in the commission, or attempt to commit, fraud or financial crime. There must be ‘clear, relevant and rigorous’ evidence in support of any fraud submissions made by members to Cifas about their customers. The type of Cifas marker loaded against Mr E was for ‘misuse of facility’. This relates to a customer’s account being used to receive and send on fraudulent funds. Cifas do accept that there are some circumstances where an individual may be duped into becoming what is known as a ‘money-mule’, and so its guidance does require members to speak to their customers to determine whether they were witting or not. It further requires members to have enough evidence to show that the consumer was aware that they payment they were receiving was, or might be, from an illegitimate source – though they do not need

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to know the exact provenance of such funds. So, the relevant findings for me to make are whether I believe there is sufficient evidence to conclude than on balance, firstly, that the money sent to Mr E was as a result of a fraud; and secondly that Mr E was aware that the funds he received were or might be from an illegitimate source. The funds which entered Mr E’s account were reported as fraudulent by the sending bank. I won’t go into all of the details, but the senders of multiple payments reported that they were the victims of a purchase scam. The circumstances the, presumably, independent senders reported were all in line with the same scam having been perpetrated against them – and Mr E has not demonstrated that he had a legitimate entitlement to these funds. So, I am satisfied that funds were sent to Mr E’s account as a result of fraud. I’ve thought about what Mr E knew or ought to have known about the payments. And I am persuaded that he knew that the funds were, or might be, from an illegitimate source. I say this because, in summary: • When Monzo questioned him about one of the fraudulent payments and his entitlement to those funds he responded to it saying “This money was sent in exchange for a service that was done online”. The only supporting evidence he provided was a screenshot of the confirmation of payment from the sender, which Monzo had clearly stated would not be accepted as source of funds. He is not specific about the service, and did not provide any evidence in support of this. • Monzo reached out again to ask him about the source of funds for another payment, but he failed to respond to it on this occasion. Monzo could see he was active in the app at the time. This means he had another opportunity to either show that he had a claim to these funds, or tell Monzo what was going on if he had been duped into receiving them. He decided to do neither. • He told Monzo that one of the senders would be in touch to say the payment was “legit”. The sender did originally get in touch to say that it was not a scam and that the person she had been speaking to have contracted them and reassured them. But they later got in touch to say they had in fact been the victim of a scam. The fact Mr E had said this person would get in touch does raise the possibility that he was the one directly running the scams, or he was in close contact with whomever was. • Further to this, Mr E was able to send the screenshot from one of the senders, so again it seems likely that he may have been the person interacting with victims or was in communication with the person who was. • Mr E has not provided our service with a clear explanation of why he received the funds, or any evidence which supports that he received these fraudulent funds unwittingly. He said that they were unsolicited payments from individuals he did not know or contact. But it would seem strange for an unknown third party to solicit funds to be sent to Mr E without him knowing – so I do not think this is most likely what happened here. He has suggested this is part of an attempted fraud on him, but there is no explanation as to how this would have worked, or how an unknown third party had all of the details required to get the victims here to send Mr E the funds. Evidence of spam emails would not explain this. And this is not in keeping with what he told Monzo when it asked him about one of the payments. Had he received unexpected funds and been questioned about them, I would have expected him to tell Monzo this in the first instance.

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So, when considering all of this, I think that Monzo had met the evidential threshold to refer their concerns to Cifas in this case. Mr E has raised that the payments were for small amounts, but this does not change the overall outcome here. The test does not mention the amount of the fraud or financial crime – merely that fraud or financial crime was committed or attempted. Did Monzo follow the correct procedures for closing Mr E’s account? The terms and conditions of Mr E’s account with Monzo allowed for immediate closure in certain circumstances, including if it believes he has broken the law, or attempted to break the law. Given everything that I have outlined above, I think Monzo could fairly act within their terms and conditions to close Mr E’s account with immediate effect. Were there issues in the level of service Monzo provided Mr E? I’ve looked at the timeframes from when Monzo reached out to query Mr E about a payment after a fraud report, through to the decision to close his account and refer him to Cifas. This whole process took around two weeks, which is not unreasonable in the circumstances. My final decision I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr E to accept or reject my decision before 28 April 2026. Katherine Jones Ombudsman

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