A significant banking institution has come under fire for incorrectly denying refunds to over a thousand customers, according to a recent report from a regulatory authority.
In a startling revelation, the Financial Ombudsman Service (FOS) identified Monzo as the leading offender in 2025 regarding the unjust refusal of refunds to clients who fell victim to scams or fraudulent activities. This online bank, which boasts more than 14 million customers across the UK, was found to have made erroneous judgments in 34% of the 3,372 cases that were escalated to the ombudsman. This alarming statistic translates to more than 1,000 complaints where the bank's decision was deemed incorrect.
Following closely behind was NatWest, which mistakenly rejected 33% of 1,972 fraud-related claims, and HSBC, with a 32% error rate on 2,535 complaints.
A representative from Monzo defended their record by stating, "This data is historical, and some of these cases stem from fraudulent incidents that occurred more than two years ago." They further explained that the bank has been actively investing in advanced technology to combat fraud effectively. In fact, they reported that in 2025, they managed to prevent fraud amounting to 2.9 times the value lost the previous year.
HSBC also weighed in, asserting their commitment to adhering to regulatory standards regarding mandatory scam reimbursements. They highlighted that in the past year alone, they refunded over 13,000 claims related to scams and successfully prevented more than £130 million from being defrauded from their customers. The spokesperson emphasized that the FOS data only represents a small fraction of cases referred to them and does not reflect the many customers they assist yearly through proactive measures and support.
As for NatWest, they were also approached for a comment but had not responded at the time.
What should you do if you believe you're owed money?
If you find yourself on the losing end of a scam, it’s essential to know that you might be eligible to retrieve your lost funds from your bank. New regulations implemented in 2024 mandate banks to compensate customers who unwittingly transferred money to scammers through authorized push payment fraud, a tactic where criminals impersonate legitimate payees. This encompasses various types of scams, including romance frauds, purchase schemes, impersonation tricks, and investment frauds.
Customers can claim back up to £85,000 from their banks, although some banks may decide to issue refunds exceeding this amount. To initiate a claim, simply call the number listed on the back of your debit or credit card or look for the contact number on your bank statement. You can also reach your bank's fraud team directly by dialing 159.
Typically, you can expect to receive your refund within five working days after filing your claim, although if your bank requires additional time to gather relevant evidence, this process may extend up to 35 days. If your refund request is denied, it's advisable to file a formal complaint with your bank first, and then consider reaching out to the Financial Ombudsman Service, which could assist in recovering your funds.
So, what do you think about these findings? Do you believe banks are doing enough to protect their customers from fraud? Or do you think more stringent measures should be enforced? Feel free to share your thoughts in the comments!
