Monzo Bank Ltd · DRN-6252716

The complaint Mr T has complained about how Monzo Bank Ltd (Monzo) handled his refund claim. What happened The details of this complaint are well-known to both parties, so I won’t repeat them again here. The facts aren’t in dispute, so I’ll focus on giving the reasons for my decision What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. I’ve read and considered the evidence submitted by the parties but won’t comment on it all – only the matters I consider to be central to this complaint. This isn’t intended as a discourtesy but reflects my role in resolving disputes informally. It’s important to note that Monzo aren’t the provider of the services here – so in deciding what is fair and reasonable, I’m looking at their role as a provider of financial services. In doing so I note that because Mr T paid for this transaction using an Monzo flex credit card, both chargeback and a Consumer Credit Act 1974 (CCA) Section 75 (S75) claim could possibly help him. So in deciding what is fair and reasonable I’ve focused on this. In summary, Mr T’s complaint is regarding payments he made using his Monzo credit card in early 2024 for a training course to a supplier I shall call ‘D’. Mr T says that while he received some training, the training course was withdrawn and therefore he lost access to the service. As the matter wasn’t addressed with D, Mr T contacted Monzo to raise a chargeback claim for these transactions. Chargeback Chargeback is the process by which settlement disputes are resolved between card issuers and merchants. A consumer isn’t entitled to chargeback by right. But where there are grounds to raise one and it has reasonable grounds for success, it is good practice for one to be raised by the card issuer. However, a chargeback isn’t guaranteed to succeed and is governed by the limitations of the particular card scheme rules (in this case Mastercard). I’ve considered the relevant chargeback rules in deciding whether Monzo acted fairly. The relevant chargeback code here would be ‘Goods or Services Not Provided’. I’ve therefore considered the evidence available with regard to this chargeback rule and whether Monzo acted fairly when they declined Mr T’s claim following the merchant’s objection. Firstly, I’m aware that Monzo only raised one of the transactions made here when they should’ve considered all three of the transactions. Monzo has agreed this was an error on their part and they should’ve raised chargebacks for all the related payments. In this case

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there were three payments of £297 made between April, May and June 2024 so totalling £891. I’m also aware that Monzo initially declined Mr T’s claim as they considered that he had been provided the training services he had paid for. However, they later offered a refund of £495 referring to the scheme rules which state: “Interruption of ongoing services The issuer must only charge back an amount representing the services not received by the cardholder. When an end date is not defined, then the issuer must calculate the prorated amount based upon 18 months”. I’ve reviewed D’s terms and conditions for the course which stated that the programme would include 100% course completion, virtual group coaching and support calls and private social media group participation. It also said that the Academy programme would include access to pre-recorded virtual online modules, live social media sessions and private access to these online groups. However, these terms and conditions don’t include any information to the length of the programme and how long these services would be provided for. A screenshot from the course website provides an answer to the question ‘How does the training take place? Is it face-to-face?’ by stating that the course is online and the consumer should follow it at their own pace, ‘whenever you want and wherever you are’. I don’t think it’s reasonable to interpret this as a contractual commitment to provide the service indefinitely. The Mastercard rules indicate that where no end date is defined, the refund should be calculated on a prorated basis, typically using an 18-month period where no end date is defined. Monzo has said Mr T confirmed he had received 8 months of the service from the maximum 18 months as stated in the card scheme rules. They also said there was no evidence of a specific qualification to be attained at the end. As a result, they felt a prorate amount for the course remaining up to the maximum permitted was a fair application of the rules. Just to confirm, this is with consideration that the maximum 18 months of service at £891 would break down to £49.50 a month. And as Mr T would’ve had 10 months remaining of the maximum period stated under chargeback rules, this would then amount to £495. I do agree, and while I appreciate Mr T considers that there is sufficient evidence in the documentation relating to the course to say that it was offered indefinitely, I must consider the card scheme rules when determining if Monzo handled the chargeback fairly. In this case, I don’t think there was a reasonable prospect of success if the chargeback claim had progressed for a higher amount. This is because Monzo’s offer is with consideration of the card scheme rules. So while I’m aware that Monzo initially declined the chargeback claim, I do think their current offer here is appropriate for what has happened. Monzo has also said that this refund was already applied and in addition interest was also refunded, totalling £116.26. I do think this is appropriate and I won’t be asking them to do anything more.

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S75 S75 provides that in certain circumstances the borrower under a credit agreement has an equal right to claim against the credit provider if there is either a breach of contract or misrepresentation by the supplier of goods and services. To assess a valid claim, there to be a valid claim under S75 there are certain technical requirements and I’m satisfied they’ve been met here. I’m aware Monzo has not considered a S75 claim here and so I’ve reviewed the available evidence to consider if there could’ve been a successful claim for breach of contract or misrepresentation. I understand D only issued general terms and conditions regarding this course. As Mr T is aware, these do not provide any details on the length of the course, nor do they say that the service would be available indefinitely. Mr T did provide email correspondence from D dated 21 November 2024 which confirmed lifetime access to course materials as well as ongoing coaching sessions. While I’ve considered this email which refers to ‘life-time access’, I don’t think this is enough, on its own, to establish a breach of contract. That’s because the terms of the agreement don’t appear to include any clear or binding agreement to provide access on a lifetime basis or to deliver ongoing coaching indefinitely. Instead, I consider the core of what was agreed was the provision of the course itself – namely access to and completion of the course content which Mr T confirmed was pre-recorded. I also have insufficient evidence to show that this wasn’t completed during the eight months within which Mr T had access. While the email references additional benefits, I’m not persuaded these formed part of the contractual terms, rather than being supplementary benefits to the main course. So in the absence of clear evidence that the lifetime access and ongoing coaching were agreed as contractual obligations, I don’t think this amounts to a breach of contract by D. I’ve also considered the promotional material provided by Mr T which states the course could be completed at his own pace and whether this amounts to a misrepresentation by D. Here I don’t think it does. For a misrepresentation to arise, there would need to be a clear, false statement of fact that induced Mr T to enter into the agreement. In this case, I’m not persuaded that the wording of the promotional material was sufficiently clear, specific or definitive to amount to a binding statement of fact, rather than general promotional language describing the overall experience or potential benefits of the course. And importantly, the contractual terms – which set out what was actually being provided – focus on the course completion itself of the pre-recorded virtual online modules alongside group coaching and support calls along with online group participation. So I don’t think it’s been shown that any statement about lifetime access or ongoing coaching was both false and also materially induced Mr T’s decision to purchase the course in a way that would amount to a misrepresentation. I therefore don’t think there would’ve been a different outcome if Monzo had raised a S75 claim because I don’t think there was a breach of contract or misrepresentation by D

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Monzo’s general handling of the claim I won’t go into this in too much detail as all parties are aware of the circumstances, but it’s clear that Monzo didn’t administer several aspects of the claim well. I’m aware that only one of the chargeback transactions were raised, and Mr T was also repeatedly asked for the same evidence which would’ve clearly been very frustrating for him. Monzo has said they would like to offer £175 compensation for the distress and inconvenience suffered. I do think this is fair for what’s happened here. In addition Monzo also sent a final response letter (FRL) to Mr T with another consumer’s details on them. They issued a subsequent FRL on 23 April 2025 offering an apology of £40 for the error and an assurance that they had followed the Information Commissioner Office’s instructions to confirm that any concerning private details hadn’t been shared with Mr T. I do think this is an appropriate outcome here and I don’t think Monzo need to do anything more. In summary, while I appreciate this may be disappointing for Mr T, I do think Monzo’s offers are fair to address Mr T’s refund claim as well as the deficiencies in their claim handling. I therefore won’t be asking them to do more. Monzo has said the following payments have already been paid: • £40 was provided after the complaint regarding the incorrect FRL was upheld on 23 April 2025. • £495 was refunded on 17 September 2025 - £27.61 of this was used to clear an open instalment plan for one of the transactions and the rest were transferred to Mr T’s current account • £116.26 interest in total was refunded on 23 September 2025. This means the only part remaining is the £175 compensation payment for Monzo’s general handling of the chargeback claim and this is what I will be directing them to pay to address Mr T’s complaint. My final decision For the reasons explained, I uphold this complaint. Monzo Bank Ltd must: • Pay Mr T £175 for the distress and inconvenience suffered as a result of their handling of the chargeback claim. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr T to accept or reject my decision before 23 April 2026. Viral Patel Ombudsman

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