It was around December last year when Rhys Harford, 25, first noticed a problem. Christmas was approaching, and he planned to use the £365 in his Monzo account to buy presents for his family. However, when he got to a cashpoint in north London, his Monzo card was declined. Hoping it was just a technical error, he tried to transfer the funds to a different bank account, but found that he was unable to. After contacting Monzo, he learned that his card had been frozen for no apparent reason, and without warning.
“I genuinely thought it was just an issue with their system,” Harford tells me over the phone. “I contacted Monzo, and they told me they had nothing at this time. About a day or two later, I got a message from Monzo saying I had to source alternative banking.” Harford's Monzo account had been closed.
He continues: “A couple of days passed, and I thought it would take three to five days [to get the money back]. I then got an email from them saying it was going to take two to four weeks. That £400 was everything I had to last 'til after Christmas.”
Monzo, the banking start-up loved by millennials, has over three million users. Launched in 2015, the company sees 40,000 new bank accounts opened each week, according to figures published on its website. With its neon orange card and well-designed app, plus the ability to advance your wage before pay day, the company is popular among younger consumers. The start-up has done so well that, in 2019 after a new round of funding in the US, it was valued at around £2 billion.
However, it’s not all rave reviews. Some users are accusing Monzo of freezing or closing their accounts for no reason, claiming to have had to wait to get their money back – or even not receiving it at all. In a private Facebook group called “Monzo stole my money”, which now has over 1,300 members, many are furious that their accounts have been frozen without notice, claiming that the company is being unclear about where their money has gone, or when it will be returned.
Harford says that he struggled to get information from Monzo after his account was frozen. “For over a month, I had no funds. During those weeks I kept contacting Monzo and going, ‘What's going on? What's going on?’ I just started to get tired of it, and that's when I came across the Facebook group.”
It was here that Harford found the advice he needed to get his money back. “I thought I was the only one,” he explains. “Turns out, there were loads of people going through the same stuff.” Others in a similar situation to Harford recommended keeping screenshots of all correspondence with Monzo, and contacting its complaints department.
In the end, it took over four weeks for Harford to receive his money back. After filing numerous online complaints to Monzo, one was finally upheld, and Harford had his money returned in full – along with £25 compensation. VICE viewed the complaints filed by Harford, as well as emails and messages between him and Monzo’s customer service team and a letter of correspondence from Monzo, which confirmed the £25 compensation for the delay in returning his money.
“I was incredibly shocked as I felt like I was being treated as if I was a criminal,” Harford says. “It was very frustrating.”
Charley Hopkins, 19, also says that she had her Monzo account frozen without warning. It happened just over a week ago when she was shopping. “I went to the shop to buy my daughter some food, and my card got declined,” she explains over the phone. “I went to transfer the money over to my other account, just in case the card wasn't working [but] it didn't let me transfer it.”
“I was in the middle of the shopping centre trying to text Monzo, and they texted me back and said my account had been frozen, and they couldn't tell me why or when it was going to unfreeze,” she continues. “They were quick to respond, but not with very helpful advice. It's all the same: ‘I'm sorry for the inconvenience, we don't have a time frame, we can't tell you why.’ I've told them I have a baby. It's stressing me out.”
Hopkins was stuck in the middle of a shopping centre with no money to buy food. “It made me feel upset and angry because that's the only money I had for my daughter,” she says. “I was relying on that money, and I was stressed and anxious because I couldn't sort anything out, and I don't have any family members close. I just didn't know what to do.”
When Hopkins contacted Monzo again, a customer service employee asked her if she had friends or family who could help: “I said ‘no,’ and I shouldn't need to [borrow money] because I have my own money.”
Hopkins received an email response from Monzo on the same day that VICE approached the company for comment. Hopkins' email response, which VICE viewed, said: “As per our terms and conditions, we reserve the right to close an account at any time. We’ve taken the unfortunate decision to close yours with immediate effect.”
The email also said that Hopkins’ funds will be “returned to the source.”
According to Monzo’s Terms and Conditions, the company reserves the right to close an account at any time, particularly if it believes fraudulent actions are taking place. In response to a 2019 Watchdog investigation into Monzo’s freezing of people’s accounts, the bank told the BBC: “Typically, if we discover that activity is not suspicious, an account that has been frozen is reactivated in ten minutes. We have robust processes and controls in place to flag any unusual activity in Monzo accounts.”
VICE reached out to the Financial Ombudsman Service, the body responsible for financial complaints in the UK. According to the most recent data it holds on Monzo from January to June 2019, it received 140 new complaints against the bank. Only 29 percent of these complaints were resolved in the consumer’s favour. Before this time frame, it received fewer than 30 complaints in a six-month period.
A spokesperson for the Financial Ombudsman Service told VICE: “If you’re unhappy with your provider [bank], get in touch with the Financial Ombudsman Service and we’ll see if we can help.”
According to Resolver, an independent online complaints service, more up-to-date Monzo complaint figures may be even higher. Last month, it told the Guardian that it had received over 700 complaints about Monzo – the majority of which were in the last six months.
This increase in dissatisfied Monzo customers may just be proportional to the growth of the bank (it had 2 million users in June 2019; in September 2019 it reported to have hit 3 million), or it may indicate issues linked with such rapid expansion.
When VICE approached Monzo for comment, a spokesperson said that the company would not be able to comment on the closing of users’ accounts without specific details on individual cases.
In the Watchdog investigation, the bank said: “Without context, which we are prohibited from sharing by law, it is incorrect to reach a conclusion about why accounts have been frozen or closed.”
It also told the Guardian: "Blocking accounts is a legal requirement, and as a regulated bank we have a duty to detect and prevent financial crime.”
Whether Hopkins and other Monzo users like her receive their money back in full, the trust between them and their bank is broken. The “Monzo stole my money” Facebook group contains stories of people who have struggled to pay rent, couldn’t access Universal Credit payments, or were stuck abroad without a functioning bank card. There’s a lot of anger towards the otherwise quite popular service.
“I've had an inconvenience, which is frustrating," says Harford. "But for others, it's been detrimental to their daily lives.”