Thousands of Monzo customers have their account closed without warning
A Facebook group set up to support customers of Monzo who had their bank accounts unexpectedly closed has reached 9,000 members, with many customers complaining that they had lost access to money they needed.
At the same time, the bank has seen a huge rise in formal complaints made against it. In 2020 there were 1,392 complaints lodged with the Financial Ombudsman about the digital bank, an increase of 177% compared to the previous year.
Resolver, the independent complaints resolution service, stated that they had received over 8,000 complaints over the last three years against four of the largest challenger banks – Monzo, Starling, Revolut and Pockit.
While it could not reveal which were specifically about Monzo, Resolver has said that 3,300 of those were complaints made about being unable to access an account, or having an account frozen.
Customers Feeling The Strain
The Facebook page was started by Ian Fisher in 2019 after he had his Monzo account frozen, without any prior warnings, leaving him without access to essential funds. Almost all of the 9,000 people who have joined the Facebook group have reported similar stories.
Bella Ahosi took over the administration of the group towards the end of 2020. She also had her account frozen in April 2020. She eventually did get her money back but only after she had taken the bank to small claims court.
I was able to navigate the system and so I wanted to help others get their money back by passing on advice. I have no idea why Monzo closed my account but I am well paid and have a good job and so it’s anyone’s guess.
The last year has seen the group take off, with 8,000 of the members only joining in the last 12 months. Ms Ahosi claims that up to 300 people a day are requesting to join the group.
The cases are becoming more and more frequent. It’s never fine for anyone to have their accounts closed but some of these people have nowhere else to turn. The closing of accounts is not the problem, it’s how long it takes Monzo to give people back their money.
I had one woman calling me up crying. She was suicidal. She had bills to pay and children to feed and she just didn’t know what to do. It’s heartbreaking. I tell everyone I know to steer clear of Monzo.
Banks do have the right to close accounts immediately without warning or explanation if they believe that the account is being used for financial crime or fraud, even if they don’t believe the customer owning the account is aware of it. They are not currently obligated to tell customers the reason for any closure.
Monzo has since said:
Monzo was not given the opportunity to look into details of these cases, despite requests to do so. Any decision to close an account follows a rigorous, manual review process and is in line with our responsibilities and requirements as a regulated bank.