Monzo fined £21m (€25m) for allowing fake addresses like ‘Buckingham Palace’

Britain’s digital bank Monzo has been fined £21 million (€25 million) for failing to prevent financial crime, after it allowed thousands of accounts to be opened using clearly fake or implausible addresses, including Buckingham Palace and 10 Downing Street.

The Financial Conduct Authority announced the fine Tuesday, July 8 citing “completely insufficient” anti-financial crimes controls between October 2018 to August 2020 with violations continuing until June 2022.

Therese C. Chambers, FCA executive director and joint executive director, issued a statement that was damning.

“Monzo onboarded customers on the basis of limited, and in some cases, obviously implausible information – such as customers using well-known London landmarks as an address,” Reuters reported.

Monzo has fake addresses and banned users.

According to the FCA investigation, Monzo opened accounts for over 34,000 high-risk clients despite an official ban imposed in 2020. Some customers who previously had their accounts shut down due to fraud concerns were able open new ones without any difficulty.

Among the failures that the FCA has identified were:

• Customers who register their accounts in royal residences or government buildings such as 10 Downing Street
• Postal boxes, mail forwarding services and fake UK postcodes
• Cards being sent overseas shortly after opening accounts
• Multiple accounts linked with a single suspicious location without proper risk checks
• Business Matters Some applicants have even used Monzo’s business address to claim residence.

Chambers warns:

“Banks are a vital line of defence in the collective fight against financial crime… Monzo fell far short of what we, and society, expect.”

Monzo was founded in 2015. It now has 12 million clients and is one the UK’s fastest growing challenger banks. The FCA stated that its internal systems were unable to keep up with the rapid growth of Monzo, particularly when it came down to vetting clients, assessing risks, and detecting suspicious activities.

Monzo joins other UK fintechs that are under serious regulatory scrutiny. In 2024, Starling Bank was fined £29 million (€39.4 million) after its systems left the financial sector “wide open to criminals”, according to the FCA.

Monzo: The issues are past

Monzo says that it has now met regulatory expectations after overhauling its compliance system.

TS Anil is the CEO of Monzo.

“The FCA findings are based on a period of history that ended about three years ago. Since then, we’ve invested heavily in systems and controls. “I am pleased that the FCA has acknowledged our progress.” Business Matters

Despite the controversy, Monzo reported a sharp rise in profits, with £60.5 million (€82.3 million) in pretax earnings for the year ending March 31, 2025, up from £13.9 million (€18.9 million) the year before. Anil declined comment when asked about the possibility of a Monzo public listing. He said it was too early to discuss a potential IPO. Reuters.

Does the Fintech boom threaten financial security?

The FCA has announced that it will tighten its oversight of the digital banking industry, as multiple banks are now being criticized. Monzo’s situation highlights a growing discussion: Do “move-fast fintechs” cut corners on fraud prevention as they race to dominate the banking industry?

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