The UK’s Competition & Markets Authority (CMA) has written to UK challenger bank Monzo regarding a breach of the Retail Banking Market Investigation (RBMI) Order of 2017.
The CMA will “monitor Monzo’s future compliance closely”
The relevant part of the regulation requires banks to outline the maximum relevant charges a current account holder can accrue in a given month if they were to exceed their credit limit.
The CMA says this ‘Monthly Maximum Charge’ (MMC) was not disclosed by Monzo when outlining costs in its fee information document between 25 October 2018 and 19 November 2021.
The watchdog says Monzo’s failure to disclose this £15.50 MMC constituted a breach of the specific regulation “designed to make it easier for consumers to be aware of the charges they may be liable to pay and compare this information easily against other [current account] providers”.
The RBMI Order’s customer-protection reforms were set in motion following the CMA’s four-year-long market investigation into current accounts.
The agency says Monzo has taken adequate steps to end the breach and prevent a recurrence, including updating its fee information documents and strengthening internal auditing processes.
The CMA adds no further action will be taken, but it “will monitor Monzo Bank’s future compliance closely”.
The rap on the knuckles from the CMA comes after the UK’s Financial Conduct Authority (FCA) launched an investigation into Monzo over potential breaches of money laundering laws in August last year.
Monzo disclosed the ongoing investigation in its annual report, which also revealed a loss of £115 million.
Despite this, the challenger is now valued at $4.5 billion following a recent funding round worth $500 million.
