Monzo Customers Unable to Access Accounts During Lockdown

Hundreds of Monzo account holders say their accounts were frozen without warning during the height of the coronavirus pandemic.

Customers of the online bank say they were left with frozen accounts and no access to funds for no apparent reason. Monzo accounts were allegedly frozen without notice despite the Financial Conduct Authority advising banks to be lenient during the COVID-19 crisis.

The FCA has released proposals to provide financial relief to consumers. The proposals announced by the FCA outline that firms are expected to back their customers during the COVID-19 pandemic.

Customers may ask for a payment freeze or an interest-free overdraft of up to £500 until 31 Oct. 2020. Firms have been asked for the continued support of customers who are still experiencing financial hardships. The proposal further states that firms work with customers to create helpful payment plans or reduce payment amounts.

Monzo allegedly told a customer that they reserve the right to close down customer accounts, and they did not give any further detail about the issue, in a comment seen by Guardian Money.

The success of the online bank has spiked rapidly and created a fanbase of customers who love the ease of an app-based bank.

Opened in 2015, Monzo has grown to have 3.8 million users. The bank plans to hire 500 more people and predicts its user base will attract 5.5. million more customers in 2020.

Monzo is regarded as the U.K.’s fastest-growing bank. The bank has also urged its customers to go “full Monzo” and use the online bank as a sole primary bank. 

But the bank has had a growing reputation for unexplained and sudden frozen accounts. Monzo accounts have been frozen without warning as far back as October.

The bank’s notoriety has become cloudy in recent months as previously content customers have had alarming complaints.

For a relatively new business, Monzo has become the target of many complaints.

One private Facebook group called “Monzo stole our money” has grown to over 3,700 members. The members of the group claim to be Monzo account holders who have had to deal with unsuspected frozen accounts and no access to their money. Many users claim their Monzo account has been shut down for no reason and the funds have taken weeks to be returned. Some users have taken legal action to get their money back.

The BBC Watchdog programme has revealed how customers have had to deal with frozen accounts resulting in financial difficulty.

According to the BBC, two users, Frankie and Chris, held three Monzo accounts that were frozen with no explanation. Frankie, who went “full Monzo,” had to wait three weeks before getting her money back.

Even more alarming, wages paid to the couple weren’t able to be accessed due to the frozen accounts. Monzo claims the money has been returned to Chris’s employer, but the couple still hasn’t received their funds.

“It’s been really stressful because it’s put us into rent arrears, it’s actually put a bit of a strain on our relationship as well,” Frankie told Watchdog Live presenter Steph McGovern. “You know, how do you explain to a 4-year-old that there’s no food in the house because of a bank?”

Monzo accounts have been frozen because the bank believes they are suspicious.

Money laundering regulations give the bank the right to freeze or close accounts, but the number of cases of frozen accounts and delays is raising concerns. 

“It just seems that they’ve grown a bit too quick and their compliance procedures haven’t caught up with their growth,” financial crime solicitor Arun Chauhan told the BBC.

Although many customers have waited longer, Monzo has been telling users that they can expect to receive their funds in two to four weeks. 

Monzo has responded to the customer complaints, saying: “Our customers have consistently praised our award-winning customer service. Feedback from customers is incredibly important and we’re always working to do better. However, in these cases, we have acted in line with our legal and regulatory obligations.”

Do you think Monzo has properly dealt with users’ accounts? Would you feel comfortable going full Monzo? Let us know in the comments.

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