The United Kingdom’s Competition and Markets Authority (CMA) has ordered digital bank Monzo Bank Limited to review its mechanism for informing departing customers of their financial transaction history.
The new direction follows Monzo’s failure to inform 13,000 customers about their financial transaction history after they quitted their accounts between May 2021 and March 2022.
The order is legally binding this time around, CMA said in a statement released on Tuesday.
Monzo’s action is a breach of the UK Retail Banking Market Investigation Order, the competition regulator pointed out.
The government department also disclosed that Monzo, which hit a $4.5 billion valuation last year, breached the same provision in 2021.
According to a public letter CMA wrote to Monzo last year, the online bank’s breach in 2021 affected 143, 437 ex-customers.
The breach lasted from March 1, 2020 and May 31, 2021.
“As a result, the CMA has issued legally binding directions requiring Monzo to make sure this doesn’t happen again and to review its procedures with an independent body,” CMA said.
“The directions are enforceable in court if Monzo fails to comply with them,” the regulator added.
Adam Land, Senior Director at the CMA, in his comment noted that financial transaction history can help customers secure loans or mortgages.
Monzo’s failure to provide the histories to customers therefore “put an unnecessary obstacle in the way of thousands of customers,” he said.
“It’s simply not good enough for a major bank like Monzo to repeatedly fail its customers by not following clear rules,” Land added.
‘Initial Changes’
CMA, however, said Monzo has informed it of “the initial changes” it has made to comply with the rule.
One of these measures is that the online bank has introduced new auto-alerts that alerts its staff members when its system defaults on sending the financial transaction history.
Monzo also said it is keeping a close watch to ensure that customers who close down their accounts get their transaction histories.
Additionally, the UK bank is developing new measures to make sure it complies with the order, CMA said.
More on the Order
According to CMA, Part 5 Article 20.6.2 of the Retail Banking Market Investigation Order 2017 requires all transaction histories to be sent within 40 days of the closure of a personal current account (PCA) or business current account (BCA).
Furthermore, Article 20.6.1 of the Order requires at least 95% of financial transaction histories to be released to a customer within 10 business days after the account’s closure.
CMA further explained, “The requirement for current account providers to provide transaction history data to customers who had their accounts closed is an important element of our reforms introduced following the Market Investigation.
“This measure, in combination with other parts of our reforms, were designed to make switching between PCAs easier for consumers.”
The United Kingdom’s Competition and Markets Authority (CMA) has ordered digital bank Monzo Bank Limited to review its mechanism for informing departing customers of their financial transaction history.
The new direction follows Monzo’s failure to inform 13,000 customers about their financial transaction history after they quitted their accounts between May 2021 and March 2022.
The order is legally binding this time around, CMA said in a statement released on Tuesday.
Monzo’s action is a breach of the UK Retail Banking Market Investigation Order, the competition regulator pointed out.
The government department also disclosed that Monzo, which hit a $4.5 billion valuation last year, breached the same provision in 2021.
According to a public letter CMA wrote to Monzo last year, the online bank’s breach in 2021 affected 143, 437 ex-customers.
The breach lasted from March 1, 2020 and May 31, 2021.
“As a result, the CMA has issued legally binding directions requiring Monzo to make sure this doesn’t happen again and to review its procedures with an independent body,” CMA said.
“The directions are enforceable in court if Monzo fails to comply with them,” the regulator added.
Adam Land, Senior Director at the CMA, in his comment noted that financial transaction history can help customers secure loans or mortgages.
Monzo’s failure to provide the histories to customers therefore “put an unnecessary obstacle in the way of thousands of customers,” he said.
“It’s simply not good enough for a major bank like Monzo to repeatedly fail its customers by not following clear rules,” Land added.
‘Initial Changes’
CMA, however, said Monzo has informed it of “the initial changes” it has made to comply with the rule.
One of these measures is that the online bank has introduced new auto-alerts that alerts its staff members when its system defaults on sending the financial transaction history.
Monzo also said it is keeping a close watch to ensure that customers who close down their accounts get their transaction histories.
Additionally, the UK bank is developing new measures to make sure it complies with the order, CMA said.
More on the Order
According to CMA, Part 5 Article 20.6.2 of the Retail Banking Market Investigation Order 2017 requires all transaction histories to be sent within 40 days of the closure of a personal current account (PCA) or business current account (BCA).
Furthermore, Article 20.6.1 of the Order requires at least 95% of financial transaction histories to be released to a customer within 10 business days after the account’s closure.
CMA further explained, “The requirement for current account providers to provide transaction history data to customers who had their accounts closed is an important element of our reforms introduced following the Market Investigation.
“This measure, in combination with other parts of our reforms, were designed to make switching between PCAs easier for consumers.”
