Monzo and Starling Struggle with APP Fraud Reimbursements

The Payment Systems Regulator’s 2022 data reveals that Monzo and Starling are among the lowest-ranking firms for reimbursing victims of authorised push payment (APP) fraud. This comes as a surprise considering their reputation for outstanding customer service operations.

TSB Topping the Charts

In the same report, TSB emerged as the leading bank for APP fraud reimbursements, refunding 91% of total APP fraud losses reported to the firm in 2022. It also topped the list in reimbursements by volume, fully returning 94% of claims and partially reimbursing 4%.

Monzo and Starling: A Poor Showing

In stark contrast, Monzo and Starling reimbursed only 22% and 37% of the value of APP fraud reported by victims respectively. Monzo was the worst-ranked provider in terms of volume, fully reimbursing a mere 6% of claims and partially returning 2%. Starling performed slightly better, fully refunding 44% of cases and partially reimbursing 6% of lost payments.

The two challenger banks also struggled to keep scam volumes in check, leading the rankings for the number of APP fraud payments sent per million transactions. Starling managed to keep total losses per million pounds of transactions to £112, while Monzo’s losses were more than double that amount.

UK Banking Sector’s Total Reimbursements

The latest fraud report by UK Finance revealed that the UK banking sector returned over £152 million in total to APP fraud victims in the first half of this year.

Response to the Report

UK Finance responded to the PSR’s figures by pointing out the role of social media and telecommunications platforms in facilitating this type of fraud. It argued that these sectors bear no responsibility for reimbursing victims, giving them little commercial incentive to counteract the substantial threat proliferating on their platforms and networks. The industry forum is calling for these sectors to do more to protect consumers by preventing these crimes from happening in the first place.