Monzo fined for giving account to fake 10 Downing St address

Digital bank Monzo accepted customers claiming to live at 10 Downing Street, Buckingham Palace and even its own premises, an investigation has found.

A lack of address verification meant it failed to spot the “implausible” use of London landmarks on applications to open accounts.

Monzo was fined £21m by the Financial Conduct Authority (FCA) for its failures regarding anti-financial crime measures.

The bank said the regulator’s findings related to problems dating back more than three years and vast improvements had since been made to its systems.

The FCA’s investigation, which has taken a number of years, found Monzo took on customers using using PO boxes, foreign addresses with UK postcodes or “obviously implausible UK addresses, such as well-known London landmarks”.

They included home of the UK Prime Minister 10 Downing Street, the Royal residence Buckingham Palace and its own business premises.

The lack of verification meant it took on risky customers who were based outside of the UK, and illustrated “how lacking Monzo’s financial crime controls were”, the regulator said.

It was one of a number of areas in which it failed to mitigate the risk of financial crime.

Monzo had grown rapidly, with the number of customers increasing almost tenfold from around 600,000 in 2018 to over 5.8 million in 2022. Many were attracted by its claims to be a digital pioneer. It has no physical branches.

However, the FCA said that Monzo’s financial crime controls failed to keep pace with its customer and product growth.

Therese Chambers, FCA joint executive director of enforcement and market oversight, said that banks were a vital line of defence in the fight against financial crime.

“They must have the systems in place to prevent the flow of ill-gotten gains into the financial system,” she said.

“Monzo fell far short of what we, and society, expect.”

TS Anil, chief executive of Monzo, said the FCA’s findings “draw a line under issues that have been resolved and are firmly in the past” as improvements had now been made.

The bank was fined for its inadequate anti-financial crime systems and controls between October 2018 and August 2020.

The FCA said it also repeatedly breached a requirement preventing it from opening accounts for high-risk customers between August 2020 and June 2022.

Mr Anil said that financial crime was an issue that affected the whole banking sector, but Monzo was “doing all that we can to stop it in its tracks”.