Monzo users ‘kept in the dark’ over credit limit charges for three years
Monzo is being watched by the competition watchdog after breaching a banking rule over a three-year period, meaning customers may not have known the full cost of going into the red.
Current account customers should receive information on the maximum charges payable each month for exceeding or attempting to exceed a pre-agreed credit limit.
This is called the Maximum Monthly Charge (MMC) which helps customers know exactly how much they will have to pay for an unarranged overdraft. This should also make it easier to compare current account costs at other banks and building societies.
However, the Competition and Markets Authority (CMA) revealed that Monzo breached this banking rule because it did not publish fees in its fee disclosure document for three years; between October 25, 2018 and November 19, 2021.
He expressed concern that Monzo personal checking account customers may not have seen the charges, as they were not displayed whenever they posted fees and charges for exceeding a limit. pre-agreed credit limit. Under the rule, the charge must be disclosed every time the information relating to this load is published.
In addition, the CMA pointed out that Monzo’s internal audit report did not identify that it was non-compliant with the MMC which was introduced as part of a bank overhaul in 2017.
However, the watchdog noted that Monzo had taken steps to end the breach and prevent it from happening again.
Monzo has been compliant since November 19, 2021 and has implemented a new procedure where the terms and conditions are subject to an annual internal review to ensure they are compliant.
Colin Garland, Director, Recourse, Business and Financial Analysis at CMA, said: “In light of the action already taken by Monzo Bank, the CMA does not consider it appropriate to take any further formal enforcement action regarding this breach at the ‘actual hour.
“The CMA will closely monitor Monzo Bank’s future compliance.”
Monzo Bank’s current maximum monthly charge is £15.50. A Monzo spokesperson said: “As the AMC has acknowledged, this is a legacy issue which we resolved last year and we have taken steps to ensure this does not happen again. more.”