An Update on Overdrafts

[Chad]

I totally agree and this is something that I have pointed out in the past

I will be running my legacy bank until things improve with Monzo, which I have no doubt will happen eventually.

[dawntrespass]

It is preferable to have an overdraft facility with monzo though as a credit controller I know that if you use your overdraft say once every now and then so it’s not a bad thing as monzo are getting profitability out of you and conversely this makes you better as a risk to lend to. That’s what goes into my thinking on an impulse purchase.

[anon81274823]

All of us have to evaluate the offer. For me no joint accounts is the deal breaker. If you require the safety net of an overdraft and Monzo can’t offer it then wait until they are a fully developed bank and can offer overdrafts to your requirements. For me Monzo has not really developed much past the prepaid days, but time will tell.

[j06 (Jamie)]

Beware, if you use the full Current Account Switch Service to transfer your direct debits to Monzo, your old account will be closed automatically as that is part of the switch. There is no reason, though, you can’t wait to do the switch until after any overdraft is confirmed at Monzo.

[Chad]

@anon81274823 j06 @j06

All very valid points and also that in respect of @dawntrespass credit controllers point of view

We will just have to wait and see how the roll out programme runs

It’s nice to see people with similar financial opinions at long last

[BethS]

There is a partial service you can use which won’t close your old account.

We have no criteria for you opening your Monzo account so feel free to keep any other accounts open for your needs

[WillP79]

Do you lose any benefits by going partial?

[SC95]

@WillP79 this is from BACS website;

[WillP79]

Hmmm…looks a bit ropey. Never mind - luckily I have two accounts with my old bank, so I can sacrifice one. Shame though- it was my student account, and has a cool account number!

[Anarchist (Press ‘Help’ search ‘Contact us’ or email help@monzo.com or call 0800 802 1281)]

@WillP79

Hmmm…looks a bit ropey

I used the partial service once many years ago. As long as you ensure that all DDs and standing orders move, and keep some cash in the old account for those times you forget to update your account details on an app you rarely use, it should be fine.

I didn’t encounter any issues in those more simple days.

[WillP79]

Sounds a bit like doing it yourself?

[Peter_R (Peter Roberts)]

It sounds like all it does is save you having to re-setup your payments, otherwise it is no different

[Anarchist (Press ‘Help’ search ‘Contact us’ or email help@monzo.com or call 0800 802 1281)]

@WillP79

Sounds a bit like doing it yourself?

Yeah. It is a bit. All my payments were transferred over for me, which was all I wanted. I think that that is the potentially time consuming but of the process of you are doing it yourself.

[j06 (Jamie)]

My take on a partial switch from elsewhere in the forum:

@j06

I’d never trust any bank, including Monzo, sorrynotsorry, to do a partial switch. As far as I’m aware the same guarantees aren’t in place, and there isn’t really any incentive for the bank clerk, who has no idea of immediate cash flow and bills, to get it right.

@j06

A partial switch, automated or not, is not subject to the Current Account Switch Service Guarantee. This means:

a) There is no time limit of seven days. Theoretically a partial switch could take over a month, crashing my mortgage payment direct debit. Nothing would technically have gone wrong from the bank’s point of view because there is no target of a week.

b) If anything were to go drastically wrong, and I find myself either out of pocket through non-payment charges, or my credit file is marked, the bank is under no obligation to make things right again.

Not going to let anyone meddle about where my mortgage is concerned.

tl;dr – do it yourself.

[tristan (Tristan Thomas)]

@tristan

Hi all,

For those of you with questions and concerns, I think they’re very valid and I’m sorry you’ve not had any information having signed up to help us test it out That’s not right.

Could you give me a bit of time to figure out exactly what’s happened? I’m off tomorrow and the rest of today is fully booked, but I guarantee I’ll have a full reply with detail by end of Tuesday. I need to catch up with a few people first to make sure I have all the info.

I’m back! This time with answers

Firstly, I’m really sorry if you have received poor/no communication from us around this. That’s totally our fault and shouldn’t be the case. We’re working to improve it now so it doesn’t happen again.

I’m going to try and clearly lay out the details for those of you who filled in the ‘early access’ form and haven’t heard anything/heard incorrect stuff. After that, I’ll give a bit more detail about general overdraft rollout.

• So…just under 10k people filled out the form saying they’d be happy to help us test the overdrafts beta. Thank you!
• Of those, we then emailed about 300 of you to say we hadn’t been able to match the email you submitted with a Monzo account. Some of those 300 were in error — you did in fact submit the right email and human error on our end meant you got that email. We’re sorry about that. You should have received a follow up email to explain this, but we didn’t. That’s totally our fault.
• We then did a soft credit check on a majority of those 10k people. This is the same check as the one that’ll happen when you sign up to Monzo if you’re signing up directly for a full current account. A proportion of those people were successfully matched against credit databases and passed our ‘eligibility criteria’ for an overdraft. If you were in that bucket, you will have received a push notification and item in your feed to let you know you can now try out the overdraft.
• If we couldn’t match you against credit databases (maybe because you moved recently) or you didn’t pass our eligibility criteria, we didn’t send you anything to let you know. This was because we hoped to be able to rerun the check in the near future with better data and then be able to let you know. Unfortunately this took longer than expected and so you were left without knowing about it. We’re sorry about that, it shouldn’t have happened.
• Finally, there were about 2.5k people we didn’t run the soft check against at all. That’s because we’d begun larger scale rollouts by then and so doing it manually would have taken too long. Again, I’m sorry you weren’t kept in the loop there.

The tl;dr of this is: if you haven’t heard anything, it could be a variety of reasons (see above) and we’re sorry we didn’t inform you better about this. We won’t let this happen again. It’s a product of running a Preview, but is still far from ideal.

So, the future! Overdraft rollouts have taken slightly longer than we thought they were going to for a bunch of technical reasons. However, we’re now in a pretty solid place and hopefully over the next month or two will be able to both a) soft credit check everyone and b) notify them if they’re eligible for an overdraft and c) let those who aren’t eligible know why they aren’t eligible and what they can do about it. These are all things that will happen.

If you’re desperately waiting for an overdraft from us, I’d ask for a little more patience now. We know it’s taken a while and we’re sorry that we haven’t communicated it to the best of our ability. We are 100% committed to rolling out overdrafts fully (it’s our main revenue stream after all), but we’re also taking the time to make sure we get it right. It’s really important that we do that. As soon as I have a clearer idea of detailed timelines, I’ll share them here.

I hope that helps and answers your questions. Thank you all!

[tristan (Tristan Thomas)]

And a quick follow up on this, which I thought was very clear

@Frankiejr

I believe this can be addressed in three ways:

Close down the google list trial. Thank everyone for taking part and let them move on.

Done

Bring back the overdraft request button and when pressed advise it is being slowly rolled out and not currently available. Link to the marketing comms explaining more details.

In progress — for now, if you don’t see the button it’s because we haven’t got to you yet. Working on it!

Update marketing comms with the expected proposition but also where they are today (slow roll out, not available to apply for, will be notified if eligible and selected to apply, eventually all can apply but not all will be successfully and will be notified as such).

Agreed, will do.

Then just continue on with the rollout and learning.

Thanks!

[Frankiejr (Frank)]

Thank you @tristan for the detailed response. I think this is all that was missing and now cleared up

One question, are users able to proactively apply for an overdraft through COps and be assessed or is the ability not yet in place?

[Chad]

@tristan

Thank you so much for this exstensive and well briefed response to the many questions that have been posted recently

I for one feel a little more content after reading the information and will now sit back and wait for things to evolve further in due course

Buisy times for the Monzo team but also like to reiterate that you stated the importance of overdraft facilities as it will be one of the main revenue generating streams for Monzo

Again thank you

[tristan (Tristan Thomas)]

@Frankiejr

One question, are users able to proactively apply for an overdraft through COps and be assessed or is the ability not yet in place?

Not at the moment. We’re just focusing on assessing everyone as soon as possible!

[michaelw90 (Michael)]

My only question is, for those that have been accepted is there a reassessment stage where the level they’ve been offered could be increased? ie. From £100 to £500 or so? Or is this the limit for the time being to mitigate risk etc?