8 ms·

Disgruntled former Monzo customer here. Do they still have a haywire fraud detection system that randomly freezes innocent people's accounts? It's happened to

by mocko 5y ago

Disgruntled former Monzo customer here. Do they still have a haywire fraud detection system that randomly freezes innocent people's accounts? It's happened to countless users and the customer experience when they do it ("we refuse to tell you why" and in some cases holding onto their money for months) is a kafkaesque nightmare. https://www.vice.com/en/article/bvg7n3/monzo-freezing-closing-accounts-complaints https://www.vice.com/en/article/bvg7n3/monzo-freezing-closin... https://www.reddit.com/r/UKPersonalFinance/comments/db9j5z/monzo_locked_my_account_and_held_my_funds_for_3/ https://www.reddit.com/r/UKPersonalFinance/comments/db9j5z/m... https://www.theguardian.com/money/2020/jun/06/monzo-customers-shut-out-of-accounts-in-lockdown https://www.theguardian.com/money/2020/jun/06/monzo-customer... I'd be far more interested in a blog post explaining that than how great their infrastructure is.

lnxg33k1 5y ago
the fear of that happening to me was the reason I terminated my account too, reading people having their main account frozen out of nowhere for months was very concerning
dwb 5y ago
https://monzo.com/blog/2019/04/04/why-we-block-freeze-close-monzo-accounts/ https://monzo.com/blog/2019/04/04/why-we-block-freeze-close-...
- mocko 5y ago
  Sure, but that doesn't explain the sheer scale on which it happens (more than other UK banks and with seemingly worse consequences) or how the system actually works. It's also notable that this post was written a year before some of the news articles, indicating that Monzo really hadn't done anything to improve it. One gets the feeling they're hiding behind the "we can't tell you why" excuse to escape accountability for a broken system that's literally ruining lives.
  - Milner08 5y ago
    They are 100% not behind the 'We cant tell you why'. It only takes the smallest amount of reading to figure that out. They have to report it to the FCA and you can read the reports from the FCA that suggest its not actually any worse than other banks. Its just more talked about. (No I am not going to dig them out for you).
    - mocko 5y ago
      Searched and I can't find any. I did, however, find a Which? article that says "Resolver found almost three-quarters of complaints about frozen bank accounts mentioned ‘digital’ banks". Statistically it doesn't seem likely that Monzo and its ilk would be so overrepresented merely because their customers are more fazed than others about having their money taken away. Still, if the FCA have published meaningful statistics I could be proved wrong. https://www.which.co.uk/news/2021/09/why-banks-are-freezing-accounts-and-what-to-do-if-it-happens-to-you/ https://www.which.co.uk/news/2021/09/why-banks-are-freezing-...
      - bostik 5y ago
        I can't tell which way the arrow of causality points, but all the digital banks in the UK are in various stages of still growing to reach the scale where they can become sustainably profitable. This in turn means that they will have their risk assessments inverted from the usual high-street banks: optimise signup/account creation flow, and deal with AML requirements in a slightly delayed fashion. Making it really easy and smooth to open a current account brings in a surprising fraction of the crowd who would be rejected or otherwise earmarked by high-street banks. Being digital upstarts, these modern banks also don't have the fraud and risk departments their established competition has. In order to not get hammered by the FCA, they almost certainly veer on the blunt instrument side when dealing with suspicious activity. And law of large numbers guarantees that there will be a significant number of false positives.
        dazc 5y ago
        As a former Barclays customer I can confirm this. Last year I changed from self-employed to limited company and changing my business account at Barclays proved to be impossible despite always previously being in credit with no issues at all. I was able to open a monzo business account in less than 20 minutes. This, I should add, at a time when there was a high incidence of fraud with people trying to open business accounts for dormant and non-existent companies simply so they could claim Govt backed loans where it was clear that very few checks were actually being carried out.
MaxBarraclough 5y ago
> "we refuse to tell you why" and in some cases holding onto their money for months I don't know anything about Monzo specifically, but perhaps anti-money-laundering laws might be the reason. Monzo is presumably obligated to take steps against money laundering, under UK law, where it's essentially an offence to say Our system has flagged you as a potential money-launderer. [0] Freezing your account without comment may be their safest course of action. edit I see this explanation was mentioned in the reddit thread. [0] https://www.lawsociety.org.uk/en/topics/anti-money-laundering/tipping-off-a-client https://www.lawsociety.org.uk/en/topics/anti-money-launderin...
YawningAngel 5y ago
No UK bank will ever tell you why your account is frozen, and this is why: https://www.cps.gov.uk/legal-guidance/money-laundering-offences#:~:text=of%20an%20offence.-,Tipping%20Off,business%20in%20the%20regulated%20sector https://www.cps.gov.uk/legal-guidance/money-laundering-offen.... Source: used to work on Monzo's financial crime team.
- 0des 5y ago
  I'd love to read a thread where you and OP try to see maybe what happened, theoretically, in Minecraft of course.
  - YawningAngel 5y ago
    I used to work there :)
- gadders 5y ago
  So 100% of account locks are due to money laundering, then? Not card theft, fraud, error or anything else?
- stavros 5y ago
  The link doesn't really clarify much for me, can you elaborate? Are you saying the GP laundered money?
  - YawningAngel 5y ago
    I'm saying that the bank gets royally fucked if they ever tell anyone who is even suspected of money laundering anything, so as a result they simply don't tell anyone anything. Whether the GP actually did it or not isn't really relevant because banks would rather lose a customer than incur the regulator's ire.
    - stavros 5y ago
      Ah I see, thank you.
corobo 5y ago
My money is on it being crypto related, but that’s because the only people I’ve seen complaining about this publicly were doing some crypto stuff (tx both in and out) and it looked very laundry-esque out of context when you get into the actual details And yeah as others have said that’s not a Monzo thing not telling you, no UK bank would tell you why they think you’re laundering money
- mocko 5y ago
  Not in my case - no crypto, no recent large transfers. I'm a boring middle-aged IT consultant, not a terrorist, drug dealer or crypto trader. There was absolutely nothing I'd done with my account that should have caused this to happen. That's what's so kafkaesque (and frankly rather violating) about the experience: you literally haven't the faintest idea what you've done wrong and the bank refuses to tell you.
  - porker 5y ago
    Use First Direct. They're designed for boring middle-aged IT consultants. :)
    - mocko 5y ago
      Not disagreeing (First Direct has a far better reputation) but it's really a brand of HSBC. The irony of having to move to a bank suspected of funding [1] actual drug dealing/laundering/terrorism so my accounts won't get frozen over imaginary drugs/laundering/terrorism is somewhat amusing. [1] https://www.thebureauinvestigates.com/stories/2021-07-28/money-laundering-ring-pushed-4.2bn-through-hsbc https://www.thebureauinvestigates.com/stories/2021-07-28/mon... / https://www.forbes.com/sites/afontevecchia/2012/07/16/hsbc-helped-terrorists-iran-mexican-drug-cartels-launder-money-senate-report-says/ https://www.forbes.com/sites/afontevecchia/2012/07/16/hsbc-h...
      - aaaaaaaaata 5y ago
        They're not suspected, they admitted it, and paid their speeding fine.
nvarsj 5y ago
Happy Monzo customer here with it as my primary account for the last 2 years. Haven’t had any issues, and neither have any of my friends. It’s the best possible banking experience imo. I’m happy they are proactive about suspicious activity.
- stuckkeys 5y ago
  Sounds like a paid “amazon” review. lul
  - xyst 5y ago
    Probably works at Monzo
  - nvarsj 5y ago
    Haha, I just wanted to provide a counter example to the complaint. Yeah, it did sound a bit like a shill. Just a happy customer though.
  - Closi 5y ago
    Ah yes, a long term commenter with 10 years of posts, housands of Karma and hundreds of unrelated comments was just playing the long-game so they could shill Monzo. And it was a person who just joined the site that found them out! /s I've also had great experiences with Monzo, so will also back them up.
- Milner08 5y ago
  Same here. Its funny that you get accused of being a paid shill, yet the people who so loudly complain get taken seriously. I dont know anyone who's had an issue and I would say 90% of my friends have monzo.
- festive-minsky 5y ago
  Same here. I've been using them as my main account for years, no problems since I'm not trading crypto. People act as if no other bank has issues with fraud detection
- benhurmarcel 5y ago
traceroute66 5y ago
> Do they still have a haywire fraud detection system that randomly freezes innocent people's accounts? I As others have pointed out already, AML/KYC laws are strict. They are strict in general for financial services, but for banks, because of their privileged position in the financial system, its even stricter. But there is a second aspect which is that challenger banks such as Monzo take an even more cookie-cutter approach. If you don't fit their definition of what a "client" is then you will be in for a hard time. Normal banks do this too (to a degree) but challenger banks are much more hard-core about it because if you fall outside the cookie-cutter then you mess up their fragile business model. Case in point, I know of a well-known, well-established, UK VoIP operator. They moved their business over to one of these challenger banks (might have been Monzo !) because the challenger bank provided APIs to enable integration to their internal systems, which is something that the old-school high-street bank did not offer - and the banking fees were lower too, always a bonus ! TL;DR: $challenger_bank had a definition of a client that did not include provision of VoIP services. So after about a year as a client, said VoIP provider found their account frozen (in this instance they were explicitly told, it wasn't a silent freeze). VoIP provider attempted to constructively engage with $challenger_bank but it was like talking to a brick wall "computer says no". (N.B. I have oversimplified the story a bit, so please don't nitpick !)
- Nextgrid 5y ago
  Is it Andrews & Arnold? I remember their director blogging about moving the business to Monzo so they can get real-time webhooks for incoming payments. I've just checked and they still appear to be using Monzo as per their "bank details" page.
  - traceroute66 5y ago
    > Is it Andrews & Arnold? Nope, not them. I'm surprised they haven't been frozen given Monzo's stated policy[1]: "Certain industries have higher risks, where we need to put extra checks and controls in place. We’re currently focusing on industries that don’t need these. In future, we might offer accounts to some of these industries. But we appreciate this is disappointing for some businesses at the moment." Followed by a long list that includes "technology equipment, like lasers or telecommunications" (For those wondering, telecoms wasn't there at the time the other guys had an account, and they were not selling equipment anyway) [1] https://monzo.com/i/business/eligibility/ https://monzo.com/i/business/eligibility/
drcongo 5y ago
Disgruntled former Monzo customer here too. Froze my account after I cashed out some bitcoin on Coinbase, held on to all my money for over a year and refused to answer support requests. Only got my money back off them when I brought the financial ombudsmen into it. Don't touch them with a ten foot pole.
- deleted 5y ago
  [deleted]
- Milner08 5y ago
  They explicitly tell you that Cypto is banned tbf.
  - Dig1t 5y ago
    Wait huh? Is this a UK law? Or they don't support transfers from Coinbase for some other reason?
maxehmookau 5y ago
Yeah, this ended up on Watchdog on UK TV which was entirely unfair. No UK bank can tell you why your account was frozen, it's illegal to do so. (I don't work for Monzo, but I've been a happy customer since day 1)
nnx 5y ago
Most likely some automated AML check... You are simply a false positive of this ineffective policy that has a success rate of 0.2% according to recent United Stations study: https://www.effectiveaml.org/un-slams-aml-success-rate/ https://www.effectiveaml.org/un-slams-aml-success-rate/ Globally, it has almost zero impact on crime for an infinite cost.
rand49an 5y ago
Didn't ever have that trouble but I have been repeatedly turned down for a joint account while both me and my partner have good records with credit, high earners and no worrying financial history. Switched to Starling instead and created one instantly.
deleted 5y ago
[deleted]

by mocko 5y ago

lnxg33k1 5y ago

the fear of that happening to me was the reason I terminated my account too, reading people having their main account frozen out of nowhere for months was very concerning

dwb 5y ago

https://monzo.com/blog/2019/04/04/why-we-block-freeze-close-monzo-accounts/ https://monzo.com/blog/2019/04/04/why-we-block-freeze-close-...

mocko 5y ago
Sure, but that doesn't explain the sheer scale on which it happens (more than other UK banks and with seemingly worse consequences) or how the system actually works. It's also notable that this post was written a year before some of the news articles, indicating that Monzo really hadn't done anything to improve it. One gets the feeling they're hiding behind the "we can't tell you why" excuse to escape accountability for a broken system that's literally ruining lives.
- Milner08 5y ago
  They are 100% not behind the 'We cant tell you why'. It only takes the smallest amount of reading to figure that out. They have to report it to the FCA and you can read the reports from the FCA that suggest its not actually any worse than other banks. Its just more talked about. (No I am not going to dig them out for you).
  - mocko 5y ago
    Searched and I can't find any. I did, however, find a Which? article that says "Resolver found almost three-quarters of complaints about frozen bank accounts mentioned ‘digital’ banks". Statistically it doesn't seem likely that Monzo and its ilk would be so overrepresented merely because their customers are more fazed than others about having their money taken away. Still, if the FCA have published meaningful statistics I could be proved wrong. https://www.which.co.uk/news/2021/09/why-banks-are-freezing-accounts-and-what-to-do-if-it-happens-to-you/ https://www.which.co.uk/news/2021/09/why-banks-are-freezing-...
    - bostik 5y ago
      I can't tell which way the arrow of causality points, but all the digital banks in the UK are in various stages of still growing to reach the scale where they can become sustainably profitable. This in turn means that they will have their risk assessments inverted from the usual high-street banks: optimise signup/account creation flow, and deal with AML requirements in a slightly delayed fashion. Making it really easy and smooth to open a current account brings in a surprising fraction of the crowd who would be rejected or otherwise earmarked by high-street banks. Being digital upstarts, these modern banks also don't have the fraud and risk departments their established competition has. In order to not get hammered by the FCA, they almost certainly veer on the blunt instrument side when dealing with suspicious activity. And law of large numbers guarantees that there will be a significant number of false positives.
      - dazc 5y ago
        As a former Barclays customer I can confirm this. Last year I changed from self-employed to limited company and changing my business account at Barclays proved to be impossible despite always previously being in credit with no issues at all. I was able to open a monzo business account in less than 20 minutes. This, I should add, at a time when there was a high incidence of fraud with people trying to open business accounts for dormant and non-existent companies simply so they could claim Govt backed loans where it was clear that very few checks were actually being carried out.

MaxBarraclough 5y ago

> "we refuse to tell you why" and in some cases holding onto their money for months I don't know anything about Monzo specifically, but perhaps anti-money-laundering laws might be the reason. Monzo is presumably obligated to take steps against money laundering, under UK law, where it's essentially an offence to say Our system has flagged you as a potential money-launderer. [0] Freezing your account without comment may be their safest course of action. edit I see this explanation was mentioned in the reddit thread. [0] https://www.lawsociety.org.uk/en/topics/anti-money-laundering/tipping-off-a-client https://www.lawsociety.org.uk/en/topics/anti-money-launderin...

YawningAngel 5y ago

No UK bank will ever tell you why your account is frozen, and this is why: https://www.cps.gov.uk/legal-guidance/money-laundering-offences#:~:text=of%20an%20offence.-,Tipping%20Off,business%20in%20the%20regulated%20sector https://www.cps.gov.uk/legal-guidance/money-laundering-offen.... Source: used to work on Monzo's financial crime team.

0des 5y ago
I'd love to read a thread where you and OP try to see maybe what happened, theoretically, in Minecraft of course.
- YawningAngel 5y ago
  I used to work there :)
gadders 5y ago
So 100% of account locks are due to money laundering, then? Not card theft, fraud, error or anything else?
stavros 5y ago
The link doesn't really clarify much for me, can you elaborate? Are you saying the GP laundered money?
- YawningAngel 5y ago
  I'm saying that the bank gets royally fucked if they ever tell anyone who is even suspected of money laundering anything, so as a result they simply don't tell anyone anything. Whether the GP actually did it or not isn't really relevant because banks would rather lose a customer than incur the regulator's ire.
  - stavros 5y ago
    Ah I see, thank you.

corobo 5y ago

My money is on it being crypto related, but that’s because the only people I’ve seen complaining about this publicly were doing some crypto stuff (tx both in and out) and it looked very laundry-esque out of context when you get into the actual details And yeah as others have said that’s not a Monzo thing not telling you, no UK bank would tell you why they think you’re laundering money

mocko 5y ago
Not in my case - no crypto, no recent large transfers. I'm a boring middle-aged IT consultant, not a terrorist, drug dealer or crypto trader. There was absolutely nothing I'd done with my account that should have caused this to happen. That's what's so kafkaesque (and frankly rather violating) about the experience: you literally haven't the faintest idea what you've done wrong and the bank refuses to tell you.
- porker 5y ago
  Use First Direct. They're designed for boring middle-aged IT consultants. :)
  - mocko 5y ago
    Not disagreeing (First Direct has a far better reputation) but it's really a brand of HSBC. The irony of having to move to a bank suspected of funding [1] actual drug dealing/laundering/terrorism so my accounts won't get frozen over imaginary drugs/laundering/terrorism is somewhat amusing. [1] https://www.thebureauinvestigates.com/stories/2021-07-28/money-laundering-ring-pushed-4.2bn-through-hsbc https://www.thebureauinvestigates.com/stories/2021-07-28/mon... / https://www.forbes.com/sites/afontevecchia/2012/07/16/hsbc-helped-terrorists-iran-mexican-drug-cartels-launder-money-senate-report-says/ https://www.forbes.com/sites/afontevecchia/2012/07/16/hsbc-h...
    - aaaaaaaaata 5y ago
      They're not suspected, they admitted it, and paid their speeding fine.

nvarsj 5y ago

Happy Monzo customer here with it as my primary account for the last 2 years. Haven’t had any issues, and neither have any of my friends. It’s the best possible banking experience imo. I’m happy they are proactive about suspicious activity.

stuckkeys 5y ago
Sounds like a paid “amazon” review. lul
- xyst 5y ago
  Probably works at Monzo
- nvarsj 5y ago
  Haha, I just wanted to provide a counter example to the complaint. Yeah, it did sound a bit like a shill. Just a happy customer though.
- Closi 5y ago
  Ah yes, a long term commenter with 10 years of posts, housands of Karma and hundreds of unrelated comments was just playing the long-game so they could shill Monzo. And it was a person who just joined the site that found them out! /s I've also had great experiences with Monzo, so will also back them up.
Milner08 5y ago
Same here. Its funny that you get accused of being a paid shill, yet the people who so loudly complain get taken seriously. I dont know anyone who's had an issue and I would say 90% of my friends have monzo.
festive-minsky 5y ago
Same here. I've been using them as my main account for years, no problems since I'm not trading crypto. People act as if no other bank has issues with fraud detection
benhurmarcel 5y ago

traceroute66 5y ago

> Do they still have a haywire fraud detection system that randomly freezes innocent people's accounts? I As others have pointed out already, AML/KYC laws are strict. They are strict in general for financial services, but for banks, because of their privileged position in the financial system, its even stricter. But there is a second aspect which is that challenger banks such as Monzo take an even more cookie-cutter approach. If you don't fit their definition of what a "client" is then you will be in for a hard time. Normal banks do this too (to a degree) but challenger banks are much more hard-core about it because if you fall outside the cookie-cutter then you mess up their fragile business model. Case in point, I know of a well-known, well-established, UK VoIP operator. They moved their business over to one of these challenger banks (might have been Monzo !) because the challenger bank provided APIs to enable integration to their internal systems, which is something that the old-school high-street bank did not offer - and the banking fees were lower too, always a bonus ! TL;DR: $challenger_bank had a definition of a client that did not include provision of VoIP services. So after about a year as a client, said VoIP provider found their account frozen (in this instance they were explicitly told, it wasn't a silent freeze). VoIP provider attempted to constructively engage with $challenger_bank but it was like talking to a brick wall "computer says no". (N.B. I have oversimplified the story a bit, so please don't nitpick !)

Nextgrid 5y ago
Is it Andrews & Arnold? I remember their director blogging about moving the business to Monzo so they can get real-time webhooks for incoming payments. I've just checked and they still appear to be using Monzo as per their "bank details" page.
- traceroute66 5y ago
  > Is it Andrews & Arnold? Nope, not them. I'm surprised they haven't been frozen given Monzo's stated policy[1]: "Certain industries have higher risks, where we need to put extra checks and controls in place. We’re currently focusing on industries that don’t need these. In future, we might offer accounts to some of these industries. But we appreciate this is disappointing for some businesses at the moment." Followed by a long list that includes "technology equipment, like lasers or telecommunications" (For those wondering, telecoms wasn't there at the time the other guys had an account, and they were not selling equipment anyway) [1] https://monzo.com/i/business/eligibility/ https://monzo.com/i/business/eligibility/

drcongo 5y ago

Disgruntled former Monzo customer here too. Froze my account after I cashed out some bitcoin on Coinbase, held on to all my money for over a year and refused to answer support requests. Only got my money back off them when I brought the financial ombudsmen into it. Don't touch them with a ten foot pole.

deleted 5y ago
[deleted]
Milner08 5y ago
They explicitly tell you that Cypto is banned tbf.
- Dig1t 5y ago
  Wait huh? Is this a UK law? Or they don't support transfers from Coinbase for some other reason?

maxehmookau 5y ago

Yeah, this ended up on Watchdog on UK TV which was entirely unfair. No UK bank can tell you why your account was frozen, it's illegal to do so. (I don't work for Monzo, but I've been a happy customer since day 1)

nnx 5y ago

Most likely some automated AML check... You are simply a false positive of this ineffective policy that has a success rate of 0.2% according to recent United Stations study: https://www.effectiveaml.org/un-slams-aml-success-rate/ https://www.effectiveaml.org/un-slams-aml-success-rate/ Globally, it has almost zero impact on crime for an infinite cost.

rand49an 5y ago

Didn't ever have that trouble but I have been repeatedly turned down for a joint account while both me and my partner have good records with credit, high earners and no worrying financial history. Switched to Starling instead and created one instantly.

deleted 5y ago

[deleted]