Monzo is an app-based bank that started in 2015 and has had a full UK banking licence since 2017. Its arranged overdrafts are set up and managed in the app.
At the time of writing Monzo’s overdraft page shows rates of 19%, 29% or 39% EAR (variable) depending on your credit score, with limits up to £2,000. Because overdrafts are quick to switch on in an app, complaints can also be about whether Monzo checked you could afford the overdraft in the first place.
This isn’t the old “bank charges” claim, which closed after a Supreme Court ruling in 2009. Today’s overdraft complaints are about whether Monzo kept letting you use, or raised, an overdraft you were relying on and struggling with, without stepping in to help.
Could you have a claim?
Banks are expected to spot customers who use their overdraft heavily and repeatedly, and to contact them and offer help. Monzo may not have done enough if:
- You were in your overdraft most of every month, often for years
- Your wages only just cleared it, or never did
- Your overdraft limit was raised while you were struggling
- You had returned payments, unpaid direct debits or charges stacking up
- You were also using payday loans or other high-cost credit
What you could get back
If a complaint is upheld, the usual outcome is a refund of the overdraft interest, fees and charges from the point the bank should have stepped in. If you still owe money, the refund normally comes off the balance first. Where you’ve paid it off, 8% simple interest a year is usually added. Negative marks about that lending may also be removed from your credit file.
In one published decision (DRN-5706861) the Ombudsman found Monzo’s checks before giving a £250 overdraft weren’t proportionate, and that proper checks would probably have shown it was unaffordable. Monzo had to remove the interest, fees and charges. Every case depends on its own facts.
How to complain to Monzo
- Write to Monzo saying you were relying on your overdraft and struggling, that they didn’t step in, and asking for a refund of interest, fees and charges. Our free complaint letter has the wording.
- Monzo has 8 weeks to send a final response.
- If you’re unhappy with it, or 8 weeks pass with no answer, you can take it to the Financial Ombudsman Service for free. You usually have 6 months from the final response.
You don’t have to use a claims company. If you’d rather a regulated firm did it for you, do our free check.
More about bank overdraft claims.
Questions people ask
Can I complain if I still bank with Monzo?
Yes. You can complain about an overdraft you still have. A refund may be used to reduce what you owe first.
How far back can I complain?
Usually up to 6 years, or longer if you complain within 3 years of realising you had reason to. The Ombudsman will tell you if your complaint is too late.