The UK’s Competition and Markets Authority (CMA) has reprimanded neobank Monzo, alleging that the bank breached the Retail Banking Market Investigation Order 2017.

In an open letter to Monzo, Colin Garland, director of markets at the CMA, wrote that the bank had suffered ‘concerning breaches’, stating that Monzo had failed to comply with four provisions of the Order, which was introduced to improve competition within the retail banking sector. 

The CMA claimed that Monzo published out of date and inaccurate rankings and results tables on separate incidents last year and in 2022, breaching Part 3 of the Order and impacting service quality publications from the bank.

According to the market watchdog, Monzo also breached Part 7 of the Order by failing to publish the monthly maximum charge (MMC) alongside information relating to Relevant Charges on four occasions, including in-app, where the CMA said a notification of unarranged overdraft usage led the customer to a screen which provided information on relevant charges with no disclosure of the MMC, and lasted from August 2017 to April 2024.

Part 8 of the Order was allegedly breached when the bank failed to publish the Representative Rate information for a loan on its business banking website, and in a marketing document for a financial promotion.

The CMA said that by failing to notify the regulator of the three breaches within fourteen days of becoming aware of them, and instead taking months to approach the authority, Monzo had subsequently breached Part 12.

However, Garland’s letter goes on to note that the bank has since taken significant steps to rectify these historic complaints, including a commitment to improve its compliance processes by adding additional training specifically covering the requirements of the Order, while also completing a review of its change management processes.

On top of these provisions, the regulator highlights Monzo’s actions to enhance policies relating to the Order, including the appointment of a single executive and director responsible for compliance, and has purchased external software dedicated to mapping regulatory obligations.

“Given the actions that have been, and are being, taken by Monzo, the CMA does not consider it appropriate to take further formal enforcement action in relation to these breaches at present,” wrote Garland, but continued to say that, “The CMA will monitor Monzo’s future compliance closely.”

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Earlier this year, the CMA claimed that four major high street banks – HSBC, Lloyds, TSB, Allied Irish Bank (AIB) – had also failed to comply with banking rules under the same Order, with the regulator subsequently issuing HSBC in particular with detailed directions including an action plan to ensure compliance in the future. 

The Retail Banking Marketing Investigation Order 2017 was originally put in place after the CMA found competition concerns in the UK’s retail banking market, giving it the power to issue legally-binding directions to help banking consumers receive correct and accurate information, and ultimately receive millions in refunds.