Monzo fined 21m after customers used No 10 and Buckingham Palace as addresses - Monzo bank

The integer slope Monzo has been fined £21m implicit anemic fiscal transgression controls, aft it allowed customers to registry for accounts with “implausible” location addresses including 10 Downing Street, Buckingham Palace and Monzo’s ain headquarters.

The Financial Conduct Authority’s (FCA) punishment follows a lengthy investigation, which discovered that Monzo’s interior controls failed to support up with a emergence successful customers, which ballooned from 600,000 successful 2018 to much than 5.8 cardinal successful 2022.

The regulator said Monzo failed to make and enforce due controls for signing up customers and monitoring their transactions implicit the archetypal 2 years. It besides “repeatedly breached” rules preventing it from opening accounts for high-risk customers betwixt 2020 and 2022.

The controls were lax capable that customers were capable to registry for accounts utilizing “obviously implausible UK addresses erstwhile applying for an account”, FCA documents outlining the grade of the breaches said. That included well-known London landmarks including Buckingham Palace, 10 Downing Street, and Monzo’s concern address.

The FCA’s associated enforcement manager Therese Chambers said: “Monzo onboarded customers connected the ground of limited, and successful immoderate cases, evidently implausible accusation …

“This illustrates however lacking Monzo’s fiscal transgression controls were. This was compounded by its inability to decently comply with the request not to onboard high-risk customers.”

It besides recovered instances wherever customers of Monzo – which was founded successful 2015 and is known for its agleam coral-coloured debit cards – were capable to registry with PO boxes oregon overseas addresses with UK postcodes.

Other customers were capable to usage 1 code to use for an relationship but past reordered their paper to a non-UK location.

In different cases, aggregate customers were capable to usage the aforesaid address, raising the hazard of imaginable wealth muling: wherever a idiosyncratic allows their slope relationship to go a conduit for the proceeds of organised crime.

Monzo’s “decision” to neither verify nor show lawsuit addresses “heightened the hazard of Monzo having onboarded, and continued a concern narration with, non-UK nonmigratory customers extracurricular of its hazard appetite”, the FCA said.

The punishment ends 4 years of speculation implicit the ground of the FCA investigation, which was first disclosed successful Monzo’s 2021 yearly report.

Monzo’s main executive, TS Anil, said successful a connection that the FCA’s good drew a enactment nether issues that helium said “have been resolved and are firmly successful the past – with our learnings astatine the clip starring to important improvements successful our controls.

“I’m pleased the FCA recognises the important investments we person made, arsenic good arsenic our ongoing committedness to managing these risks today, arsenic we spell from spot to spot arsenic a concern approaching 13 cardinal customers.

“Financial transgression is an contented that affects the full manufacture – and astatine Monzo, we person the close team, best-in-class exertion and an unwavering committedness to doing each we tin to halt it successful its tracks,” Anil added.

The FCA said the good of £21.1m had been discounted from £30.1m aft Monzo agreed to resoluteness the problems.

The good comes months aft Monzo’s rival integer slope Starling was fined £29m implicit “shockingly lax” fiscal transgression controls that the FCA said “left the fiscal strategy wide unfastened to criminals and those taxable to sanctions” aft its ain monolithic growth. Starling apologised for its failings.