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Why new banks should also be worried

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New banks have great opportunities. They can fix all the things old banks do badly, using a clean sheet of paper. But sometimes they get it wrong. For example, many are fans of Monzo, one of the fastest growing UK challenger banks. I'm a fan, but have noticed one issue that keeps getting social media attention: account closures. This has resulted in many complaints from customers. According to data from the Financial Ombudsman, 1,392 complaints were made against Monzo in 2020, a 177 per cent increase on the previous year.

Because of the constant negative feedback I joined Facebook group Monzo stole our money  a year ago. It now has over 12,000 members and Bella Cioa, the group admin and a finance fraud advisory consultant with Ernst & Young, posted a fascinating and long update the other day about why Monzo keeps closing people’s accounts without warning.. It's a long read but well worth it :

Why Monzo closed your account by Bella Cioa

First of all, why accounts are frozen (Monzo internally calls them “banned” so apologies if I mix these words up. If I say banned, I mean frozen, it’s the same).

An algorithm watches your transactions and will either ban your account on the spot or flag it without your knowledge. This then goes into a queue for the “specialist” (the Financial Crime) team to look at. The team has no formal time requirement, however, informally they aim to get to all frozen accounts within 72 hours. This is the aim for a first look, sometimes they decide they need “more information”, or they need to check with their managers, in which case it can take a lot longer. The rest can sit in the queue for months.

Whether your action triggers the algorithm depends on a lot of things, and there’s also an element of randomness – you’re essentially being spot-checked being you’ve done something that’s potentially an issue. They can’t check everyone who makes a big transaction, so they just grab a portion to get a good cross-section.

The things that flag the algorithm are “potential money mulling”, which usually means you’ve spent a big amount of money in one go (received payments tend not to flag it) and “money laundering using high-value goods”, this is the same as the above except it triggers more consistently (less randomly) and occurs because you’ve spent a lot of money in a shop known to sell expensive items (think jewellery, watches, iPhones, etc). It also triggers the algorithm if you have logged in with a “device associated with a high-risk user”, or if you have “transactions associated with a high-risk user.” If a known risky user sends you money (doesn’t matter how much), or you send them money, it triggers. Again, it’s semi-random, which means you can make the same transaction a bunch of times and it will have no effect until it does. NOTE THAT a user becomes high risk anytime Monzo chooses to exit them, regardless of whether they have any evidence. They often close accounts “to be on the safe side” and that will flag you as high risk for other people (but it won’t mark your CIFAS).

Another important point is that sometimes Frontline staff can “freeze” your account manually. They’re REQUIRED to do this in certain circumstances, even if they don’t want to, and they will be heavily penalized if they don’t do it (3 mistakes in 3 months result in disciplinary action, which in my experience is most likely being put back into probation or fired). When they do this, they have to manually assign the account to a queue using a Slack channel (slack is the program they use to communicate with each other), last time I looked at the queue for this channel was 11 days. I have personally been told to ban accounts that have then been unreviewed after 15 days in busy periods with my escalation not even being checked yet. An example is if you move and forget to tell Monzo – if your card arrives at the old house and the occupant rings up to say they received it, whoever takes the call from that person will be told to ban your account. This is especially annoying because Monzo will sometimes send out cards without you asking for one.

So how can you help get your money back quickly? Monzo works very hard to keep customers away from the “specialists”. When you call up or speak to someone in the live chat, you will NEVER get through to the specialist team. They don’t take calls or pick up chats, and 99% of notes associated with the banning side of the account are hidden from Frontline. The “specialist team” work alone, they don’t share information, they don’t respond to messages asking them to prioritise certain cases, and there’s no way to access their queue. This means when you call and give hell to someone on the phone, they physically can’t help you. It’s not that they don’t want you to, they literally can’t - Monzo does this on purpose to make you frustrated with the Frontline staff to deflect your attention away. Frontline is given 3 standard responses and trained meticulously to just absorb your anger and repeat themselves. In chat, we’re taught to just send the same answers which are pre-saved into the system. There’s even a flowchart telling you what to respond with and when.

So what can you do? Truthfully, the system is designed so it isn’t much you can do. Frontline staff will get in big trouble if they tell you anything they shouldn’t, and additionally, there isn’t an “official” way to get it looked at faster. There are however the following possibilities:

  • Staff will sometimes have friends who work for the Financial Crime department. Friends will occasionally jump the queue if you ask them nicely, but note that they can get in trouble for this, so won’t do it often. Generally, we only ask if we feel sorry for people or if it felt like things are super unfair in this instance and the customer is being screwed over. If customers ring up and are mean, it’s less likely for us to want to stick our neck on the line by attempting to get the queue jumped.
  • There’s a “Vulnerable Customers” team – that’s the team they mean when they say “a special team for customers who are experiencing difficulties”. This team can force a case to jump the queue, but only in specific circumstances. Generally, it’s where someone is in a vulnerable situation – note that this is ISN’T “I can’t pay my bills”, “I can’t pay for food”, “I can’t feed my children”. Frontline hears those from every single banned user, and the company policy won’t consider that to be urgent enough to warrant the queue jump, even if everyone who works in all of the departments thinks it is. It’s reserved for “Timely Cases”, the most common being “I’m stuck somewhere and I can’t get home”. In this instance, the queue WILL get jumped. You should note however that, you guessed it, the queue for the Vulnerable Customers Team is regularly over 48 hours long, and Frontline physically don’t have the power to do anything without them. They also can’t make that any faster, even though we would often really want to.
  • If you’ve been banned in error (something rare) a Manager (known in the company as a “squad captain”) can get it overturned. I’ve seen this happen a few times.

So what should you personally do (in my opinion)? Three things. Firstly, don’t stick to one method of communication – call, chat, AND email. This clogs up the communication line and forces them to put MORE staff onto the Banned User queues to get it thinned out. This will indirectly get you seen quicker. Also, don’t go away from the chat. If you message them in the app chat, even just to ask “Any updates?” the company is REQUIRED to reply to you within 2 hours. Remember that they HIDE the chat queue in the app – you can usually find it by searching “talk to an agent” in the help articles, but if you can’t try searching “get a bank statement”. This has a link to the chat that I don’t think they know is there (although they might get rid of it when they see this, I doubt it because they have like 3 guys that do the actual app stuff as far as I’m aware). They will just respond with their “saved response” which tells you that when there is an update they will let you know, but just keep asking them every hour or so. Call repeatedly. Don’t put excessive pressure on or get overly annoyed because the person on the phone can’t help you, and this will a lot of the time cause your account to be frozen longer. Just be a nuisance and clog up the lines. Secondly, you can ask to speak to a manager. The Frontline staff will tell you “A manager can’t give you any more information than I have” but demand it anyway, and demand it by PHONE, not chat. Again, this clogs up their queue for manager callbacks and will make the Activity Lead (the person monitoring the queues) put more people onto the Banned User queue. Thirdly, specifically request a complaint. Say that the wait time for responses to your chat message has been unacceptable, the wait time for calls to be answered has been unacceptable, and the responses have been unhelpful copy-pastes. Anytime the company breaches SLA (I.E anytime they take too long to do something) they’ll just resolve your complaint by paying you money. If a member of staff has accidentally sent the wrong message, they’ll pay you money. You get the picture.

A quick note on Account Closures, I’ve seen tons of people give the wrong advice on this.

Accounts only close for four reasons:

  • You’ve committed fraud, been accused of fraud by someone else, or you’ve received money from someone who has committed fraud. This is generally when another bank reports you because their customer has complained to them that they’ve been scammed into sending money.
  • You’ve moved abroad, or they suspect you might have moved abroad
  • You’ve been abusive to staff members, either on the phone or by chat

(This is the big one because it is 80% of account closures).

  • You’ve made fraud claim(s) to Monzo (said someone used your card without your knowledge), made an ATM dispute (saying you didn’t receive money from a cash machine), or done chargeback(s) on your card (for example because the merchant scammed you, goods never arrived, or you didn’t sign up for a subscription you get charged for). If you do this for values that are too high, you do it too often, or they just don’t quite believe you, they will close your account. If you see them closing an account with two months’ notice, THIS is what has happened – no ifs, and, or buts. If they’re not completely sure, i.e they have a small suspicion it might be a lie on your part, they will usually just ban the account to be safe. They call this First Party Fraud or 1pf in the notes. If you do a subject access request and see “1pf”, that’s what it means. They’ll often redact it though. Also bear in mind that if it is only a small charge (say £20 for only fans or something) they might just mark your account as high risk but not exit you. This will be marked for life and any weird activity at all will result in a closure, however minor. I see an absolute shedload of people complaining here that their account has been closed for no reason, and I know it’ll almost definitely be because you’ve opened up a transaction dispute. Sometimes they don’t even close immediately – they wait a few weeks or months and then do it on “review”.

Regarding account closures, if they close your account it’s over – this won’t ever be overturned. There isn’t a procedure to overturn it. You also won’t be able to open an account in the future. Still, ask to raise a complaint, but don’t bother trying to open an account in the future. The system collects everything, from your date of birth to your fingerprint (yes, the fingerprint on your phone is logged) and if there’s even a whisper of a connection it’ll be rejected. You could also ask to speak to a manager (because managers can overturn it in extreme circumstances) but honestly just know this probably won’t work. It is however really annoying. Bear in mind that Monzo has been sued over this before, and the court has ruled multiple times that they have the right to close accounts for no reason – I know it sucks but you can’t do anything.

Finally, when it comes to returning your money, we’re taught to tell people this CAN take 4-6 weeks. We say it can often take longer, and in reality, it usually does. This is because when Monzo starts the process of giving your money back, it also applies to the National Crime Agency for something called a DAML. If approved, it gives them the right to withhold the money saying that it’s proceeds of crime. If this request is rejected (which is always is because they ask for one every time they ban and then close an account) they can hold the money for a further period before they return it (I can’t remember exactly how long but I think it is around a month, google it if you’re unsure). Monzo intentionally runs the clock down using this procedure – they ask for the DAML, which they know takes time, then when it's rejected they hold onto the money until the last day they’re allowed. The process of returning the money is just a bank transfer from your closed account to your new one and it’s instant.

The important point is that while Monzo has this open DAML request, or they’re in the grace period after the rejection, they legally do not have to give you your money back. They’re operating in a super grey area here but, again, I’ve seen people take court action and fail on this front multiple times. This means that once they’ve started the process of sending your money back (they call it defunding) there’s no way you can make it go faster. The people on Frontline can’t make it go faster, and anyone who can make it go faster will just ignore Frontline’s requests. This is also true if you’re “vulnerable” if they’ve asked to defund you the Vulnerable Team likely won’t get involved.

The whole system is designed to use the people on the phones and chats as meat shields while the people with the power are sheltered from the customers. It’s why it feels so pointless when you contact Monzo – the people who you talk to have all information hidden from them, and any power to do anything is kept from them.

I think that about covers everything for now, if I think of anything else I’ll add it separately. If there are any questions I’ll check back in the comments after a few days and I’ll make a big response by answering them all in one go later on. I have to do it this way because Monzo as a company will happily throw money at suing its ex-staff members, trying to push criminal charges on people who haven’t done anything wrong (just basically to cause stress and upset) and it’s rumoured that they’ll even contact future employers out of the blue to give negative references.


Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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