The United Kingdom’s competition watchdog has issued a warning to UK challenger bank Monzo over a breach of retail banking regulations under the Retail Banking Market Investigation Order 2017, reported PYMNTS.
In a Monday, January 31 letter, the Competition and Markets Authority (CMA) wrote the neobank didn’t honor a requirement of the order because it failed to publish the monthly minimum charge (MMC) for personal current accounts in its Fee Information document. The breach occurred during a two-year period, from October 25, 2018, to November 19, 2021.
According to the CMA, the measure is a key element of reforms made following the Market Investigation and is “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 [personal current account (PCA)] providers.”
By not properly communicating that information, the CMA stated it is “concerned” that the bank’s PCA customers may have missed the MMC — currently £15.50 (about US$21) — “since it was not displayed each time information on Monzo Bank’s fees and charges for exceeding a pre-agreed credit limit was disclosed.”
The regulator added, “The CMA is also concerned that Monzo Bank’s Internal Audit Report failed to identify that Monzo Bank’s Fee Information document was non-compliant with the order.”
Colin Garland, director of Remedies, Business and Financial Analysis at the CMA, who signed the letter, noted that Monzo Bank has since taken steps to end the breach and to comply the order by updating its fee information in November and strengthening “its product governance to improve awareness of all regulatory obligations.”
The challenger bank had also ensured that terms and conditions, including the Fee Information document, were changed to align with Monzo Bank’s full governance process while expanding the size of its risk management and compliance teams.
“Given the action already being taken by Monzo Bank, the CMA does not consider it appropriate to take further formal enforcement action in relation to this breach at present,” Garland wrote in the letter on behalf of the CMA, adding that it will monitor the bank’s future compliance “closely” moving forward.
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