Monzo reprimanded for failing to disclose credit limit fees
The CMA wrote to the challenger bank to say that it had breached banking rules between October 25, 2018 and November 19, 2021, but had taken adequate steps to prevent the breach from happening again.
Image source: Monzo.
Monzo has been reprimanded by the Competition and Markets Authority (CMA) for failing to disclose the maximum fees a current account holder can face if they exceed their credit limit.
The competition regulator wrote to the challenger bank about the breach and said it will “closely monitor Monzo Bank’s future compliance”.
The existing rules mean that banks must specify the maximum charges that could accrue in relation to a personal current account (PCA) in any given month, if the account exceeds or attempts to exceed the agreed credit limit.
The limit is known as the Maximum Monthly Charge (MMC).
Monzo did not publish the MMC in its fee disclosure document between October 25, 2018 and November 19, 2021. Monzo’s MMC is currently £15.50.
The letter states: “The CMA is concerned that Monzo Bank’s PCA customers may not have seen the MMC, as it was not displayed whenever information about Monzo Bank’s fees and charges for overdrafts. ‘a pre-agreed credit limit have been disclosed.’
But the CMA noted that Monzo “has taken steps to end the breach and prevent its recurrence.”
“In light of the actions already taken by Monzo Bank, the CMA does not consider it appropriate to take any further formal enforcement action regarding this breach at this time. The CMA will closely monitor Monzo Bank’s future compliance,” the statement added. CMA.
The full letter has been posted on the government’s website.