Digital bank Monzo breached banking rules when it failed to supply historic financial transactions to 13,000 departing customers.
The Competition and Markets Authority says the incidents, between May 2021 and March 2022 – and reported by Monzo to the CMA – were a breach of the Retail Banking Market Investigation Order.
The Order sets out that every customer must receive copies of their transaction history when they close their account, which acts as important evidence if they choose to apply for a loan or mortgage elsewhere.
Monzo has since contacted all affected customers to offer them a copy of their transaction history.
The CMA has now ordered the London-headquartered company to review the way it informs departing customers of their historic financial transactions – via an independent body – through legally binding directions enforceable in court.
“It’s simply not good enough for a major bank like Monzo to repeatedly fail its customers by not following clear rules,” said Adam Land, senior director at the CMA.
“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.”
Monzo has set out the initial changes it has made, including the introduction of new auto-alerts to warn staff when the system fails to issue transaction histories to customers; monitoring cases to ensure departing customers receive their transaction history; and developing new procedures to ensure the Order is complied with.
Monzo told BusinessCloud that the breach relates to historic transaction data that it didn’t send proactively – but that the information was always available to these customers.
It said there were fewer than 10 complaints as a result of the processing error over the period of a year.
A spokesperson added: “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.
“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.”