Monzo says 'no' to refund as thousands are lost to cold-callers

I lost all the money I have after fraudsters called me pretending to be from my bank. It began with a call last month from a woman who said she was from the Monzo fraud team and was flagging up two suspect transactions.

I got scared – I’m receiving therapy for anxiety – and she invited me to verify her phone number which matched the one on my bank card. She asked for my email address to verify that I am the account owner, then told me to forward to a Monzo email address, an email she would send me.

I was then asked to delete the Monzo app on my phone, without signing out, and click on an encrypted link which she had emailed to reinstate the app more securely.

She was pressuring me to act quickly. I then realised that £4,500 had been paid from my account into two different Monzo accounts.

I called Monzo immediately and reported the fraud. It froze my account, but told me I won’t be refunded because I did not take due care. I complained, and was told that there would be an investigation but that it was unlikely I would get my money back.

I am an overseas student and this was my maintenance loan. I have no money to pay bills or buy food, and can’t get a job because of the pandemic. I’m alone in this country and am so scared to tell my family back home because they will be devastated.

LB, London

Your email arrived within a week of an identical complaint from another Monzo customer, JB of London. He lost £4,000, saved for his son’s enrolment at university in September, after being called by a fraudster from a number that matched Monzo’s, flagging suspicious activity on his account.

He was taken through the same steps as LB and persuaded to transfer £4,000 to a “safe” Monzo account while the fraud was investigated. Like LB, he was told by Monzo that he would not be refunded.

Both customers fell victim to a scam known as “number spoofing” where a fraudster alters their caller ID to match the customer service number of a bank.

In May last year a voluntary code of practice was introduced to protect customers who are tricked into transferring sums to fraudsters.

The Contingent Reimbursement Model obliges participating banks to compensate fraud victims, provided they were not unreasonably negligent, and the scheme has been extended to December while the industry thrashes out how it will be funded in future.

£317m was lost by personal banking customers last year in similar scams, known as “authorised-push payment fraud”. Only 41% were refunded and, last week, the Lending Standards Board announced a review of the code amid complaints that signatory banks are failing to honour their commitment. Monzo has not yet signed up to the code, but says it is following the spirit of it.

It refunded JB and LB as soon as I questioned why they had been refused compensation. “We were already in the process of reviewing both cases,” it says. “Initially, we had declined, but senior colleagues looked at it again and decided to reverse this as they had been defrauded through no fault of their own.”

And cold-callers strike again

SP’s elderly father, who suffers from Parkinson’s, lost £3,900 when he received an automated cold call informing him he was due a £39 refund because he had been incorrectly charged for Amazon Prime. He was told to press 1 to speak to a customer services operative who instructed him to complete an emailed form and specify the £39 refund he was claiming.

“He did so while on the phone and was quickly told that the refund had been paid, but that it was £3,900 because he had completed the form incorrectly,” writes SP. “He was then subjected to a four-hour-conversation in which he was threatened with a variety of legal actions that worried him considerably. To add weight, the scammers were able to spoof his internet banking transaction screen to show that the money had been paid in.

“At some point, my dad did give access to his computer via Team Viewer, which had previously been legitimately installed by an IT contractor. To end the ordeal, he made the payment. His bank of 60 years, NatWest, declared that because he had voluntarily paid the money to the scammer, that he would not receive a refund.”

NatWest told me that, as a founding member of the code, it always supports its customers if they fall victim of a scam. When I asked why your father’s case did not qualify for protection, it suddenly reversed its decision.

“The service we provided fell short of the high standards we expect and we apologise for the distress caused by not getting this right first-time,” it says. “We’d like to remind our customers to remain vigilant, especially when receiving cold calls purporting to be from your bank or other trusted organisations.

“Customers should be particularly wary if asked to provide remote access to their device, move money to keep it safe or to return funds following an overpayment to their account.”

It’s troubling that the bank only accepted responsibility after media intervention. Victims of fraud who feel that they have been unfairly treated by their bank can take their case to the Financial Ombudsman Service.

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