Digital banking applications have become more popular than ever. The days of having to go into your local branch to access your account, or deal with other issues are long gone. Although that option is still very much available, with the help of face-to-face consultation, digital and online banking has become very convenient.
Digital Bank Monzo, since being granted a banking license in 2017, more than 3 million people have opened an account with them. Recently, Monzo have been accused of ‘freezing accounts’ without an explanation to their customers. As a result, millions of customers have been left without money and are unable to pay bills or buy food. The Startup has even directed customers to foodbanks as a result, if they complained about having no cash, according to one customer who appeared on BBC’s Watchdog Programme.
A mother told the BBC that she had been left unable to pay her rent, bills or buy food after the bank had shut down her account.
She said it gave her details of food banks when she asked for help. 'You contact Monzo on the online chat and they'll just say exactly the same thing as if they are reading from a script,' she added. She even claimed they ‘blocked’ her mobile number.
Although this has left many customers furious and frustrated, banks do have an obligation to freeze individual accounts should it show signs of criminal activity and report them to the National Crime Agency (NCA). While the NCA is investigating, they are not allowed to tell the customer what is going on because this is an offence called 'tipping-off'.
Monzo released the following statement: “The bank said: 'No conclusions can be drawn based on a bank refunding those whose accounts have been closed.
'It does not mean that they have been treated unfairly.
'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.'