Monzo has agreed to take action after the Competition and Markets Authority (CMA) found it breached four parts of the Retail Banking Market Investigation Order 2017.
The CMA issued the Retail Banking Market Investigation Order 2017 to address competition issues in the UK retail banking sector. It covers several key aspects such as open banking, service quality, account switching and overdraft charges.
Monzo was found to have breached the Order in four separate parts, Part Three, Part Seven, Part Eight and Part 12.
Part Three of the Order mandates that providers of Personal Current Accounts and Business Current Accounts conduct customer surveys to assess service quality. Providers must publish accurate and up-to-date survey results for transparency.
The CMA identified two breaches of Part Three by Monzo. First, between February 2023 and August 2023, Monzo incorrectly listed Starling Bank as the top provider in Northern Ireland’s Overdraft rankings instead of Halifax. This error appeared on Monzo’s Independent Service Quality Results Page.
Second, from 15 February 2022 to 18 August 2023 Monzo displayed an outdated Overall Service Quality table on one of its webpages. The table referenced results from August 2021 to February 2022, rather than the correct period of February 2022 to August 2022.
Part Seven of the Order requires providers to disclose the Monthly Maximum Charge (MMC) for each Personal Current Account product. This represents the highest possible charges for exceeding or attempting to exceed a pre-agreed credit limit in a month.
Furthermore, under Article 29, providers must display the MMC alongside any information about relevant charges, ensuring it is presented just as prominently.
Monzo breached this section on four occasions. From October 2023 to April 2024, its Personal Current Accounts overdraft agreement failed to meet requirements. Between March 2020 and April 2024, the “About overdrafts at Monzo” webpage did not include the standard MMC definition.
From November 2019 to April 2023, its Personal Current Accounts T&Cs disclosed information on relevant charges without the required MMC wording. Additionally, an in-app overdraft notification from August 2017 to April 2024 provided details on relevant charges but did not disclose the MMC.
Part Eight of the Order mandates providers to display representative rates for SME lending products using either the Annual Percentage Rate or the Equivalent Annual Rate. They must also provide additional contextual details to clarify these rates.
However, the CMA noted that Monzo did not publish the representative rate information for a specific loan on its business banking website or in a marketing document for a financial promotion. Furthermore, the company’s website lacked the required contextual information.
Lastly, Part 12 of the Order mandates that providers must inform the CMA within 14 days of discovering any instance of non-compliance. Monzo failed to notify the CMA of three of the breaches mentioned earlier within the required period, instead delaying notification by 5, 6, and 9 months, respectively.
The CMS’s letter, signed by Colin Garland, its Director – Markets, concluded by outlining the steps Monzo has taken to address its breaches. However, the CMA expressed concern about the behaviour.:
“Given the actions that have been, and are being, taken by Monzo, the CMA does not consider it appropriate to take further formal enforcement action in relation to these three breaches at present,” Garland’s letter read.
“However, I note that Monzo has breached Part Seven of the Order previously, making this especially concerning. The CMA will monitor Monzo’s future compliance closely.”
