The Competition and Markets Authority (CMA) has ordered Monzo to review the way it informs customers of their historic financial transactions when closing accounts after it judged the challenger bank to have broken banking rules.
According to the CMA, 13,000 customers were not sent their historic financial transactions when leaving Monzo, a breach of Part 5 of the Retail Banking Market Investigation Order 2017. The order is legally enforceable and binding in court, the CMA said.
“It’s simply not good enough for a major bank like Monzo to repeatedly fail its customers by not following clear rules,” said CMA senior director Adam Land.
“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.”
A Monzo spokesperson told UKTN that it was caused by a “processing error” and that information was “always available” upon request.
The competition watchdog ordered the neobank to review its policy with an independent body to make the necessary changes and ensure consumers are protected.
The CMA said that the breach of the Retail Banking Market Investigation Order occurred between May 2021 and March 2022.
The order established that banks must provide customers with a transaction history when they’re closing their accounts.
According to the CMA, Monzo has since contacted all affected customers to offer them a copy of their transaction history.
“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,” said a Monzo spokesperson. “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.”
It’s not the first time that Monzo has clashed with the regulator for breaching banking rules. In February, the CMA gave Monzo a warning after it “failed” to sufficiently disclose the monthly minimum charge for its personal current account.
In December Monzo raised $500m in a funding round that gave it a valuation of $4.5bn.