CMA calls out Monzo for breaching banking rules
The CMA said ‘it’s simply not good enough’.
The Competition and Markets Authority (CMA) has told Monzo it must review the way it handles departing customers after it breached an Order this year.
The Retail Banking Market Investigation Order sets out that every customer must receive copies of their transaction history when closing an account.
This is something Monzo failed to do for 13,000 of its departing customers.
Monzo has since contacted all affected customers, and said that while it did not proactively issue some customers with the summary of their historic transactions, all information was available on request.
“It’s simply not good enough for a major bank like Monzo to repeatedly fail its customers by not following clear rules,” CMA senior director Adam Land said.
“Having a record of your financial transactions can act as important evidence needed to secure a loan or mortgage – so Monzo’s failure to provide these put an unnecessary obstacle in the way of thousands of customers.
“We have ordered the bank to make changes which mean customers should not face this issue in the future. We’ll be watching to make sure proper procedure is followed.”
This is not the first time Monzo has come under fire from the CMA for breaching its rules.
Last year the CMA found the challenger bank guilty of a similar breach that affected more than 143,000 ex-customers.
Following this year’s breach, Monzo has set out several changes, including introducing auto-alerts to warn staff when the system fails to issue transaction history, monitoring cases for departing customers and “developing new procedures” to make sure it complies with the Order.
Monzo said that it received fewer than 10 complaints as a result of the processing error over the course of a year.
“Unfortunately, due to a processing error, some customers were not proactively issued with historic transaction data, however this information was always available to these customers at their request,” a Monzo spokesperson told AltFi.
“As soon as we were aware of this issue, we fixed it on the same day and contacted all impacted customers as soon as possible. We apologise for any inconvenience caused.”
Following last year’s breach, the CMA did not consider it appropriate to take “further formal enforcement action” given the action Monzo was taking.
This time the CMA has issued legally binding directions requiring Monzo to ensure this does not happen again and to review its procedures with an independent body.
The directions are enforceable in court if the online bank fails to comply.