Blocking accounts, Monzo stripping rights and legal oversight?

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A few years ago I had a horrific experience with a high street bank. In the middle of a 7 month trip in South America I was informed that my bank account was being close with no explanation given and no right to appeal (this wasn’t related to any overseas transactions).

In the coinbase thread, I just read this:

One sentence stands out a lot:

we’ll co-operate with any requests from law enforcement

The tone of the post is very much as follows:

Blocking accounts is a legal requirement

We’re a regulated bank. That means as part of our banking license, we have to follow a lot of very specific rules and codes of conduct. Our regulators are the Financial Conduct Authority and the Prudential Regulation Authority (part of the Bank of England). These bodies keep us in check and make sure we’re following all the relevant laws.

In particular, there are anti-money-laundering and counter-terrorism-financing rules. These mean we have obligations to act in certain ways when we detect or suspect Monzo accounts are being used for criminal activity. And that’s a good thing. It protects us from terrorists and money launderers, and protects you from crime.

However this sentence is carefully worded to be something that reaches far beyond that. Most people say instead, something like “when legally obliged, we’ll co-operate with any requests from law enforcement”. Omitting this point means that all due process can be avoided.

In a free parliamentary democracy with an independent judiciary, there’s very good reasons why there are checks and balances.

The Criminal Finances Act 2017 (CFA) introduced Account Freezing Orders (AFOs) and the Proceeds of Crime Act 2002 (c.29) (POCA) provides legislation for Restraint Orders and Charging Orders. Restraint Orders require more than police or CPS suspicion - a judge has to be convinced on the balance of probabilities (and they still get it wrong often). Similarly, an application for an AFO is made in the Magistrates’ Court.

What it appears Monzo are doing here is sidestepping all of this legal accountability. They are saying that they will effectively freeze accounts without any decision being made by a court or judge on the hearsay of law enforcement. This strips away all the protections the law has been at pains to provide you.

My story with my bank was a almost year-long saga. My first few visits to my manager were confusing as they had no idea what was going on. Once I’d explained my situation and they were satisfied the block was an error, it was still several months before we could work out the right department to get everything working again. It was hugely stressful and a massive loss of time.

And this wasn’t even due to law enforcement but an automatic “unusual activity” trigger than hadn’t been set up correctly.

Voluntarily taking away checks and balances does nothing to protect your money and means more people could be caught out in similar situations. The police are not exactly well-known for not trying to overstep their powers when they can. Nor are they frequently well-educated on new technologies and often fear things like crypto because they don’t understand it. And the reality is that if there’s a case at all, it’s very easy to apply for ROs and AFOs. The very fact law enforcement would ask a bank to do something without first applying for the order under well established provisions is a huge red flag.

Could Monzo clarify why they have chosen this wording and why they are collaborating with law enforcement to strip away financial rights?

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They have to act within the law. If there is a request which is made in accordance with the law they will follow it

Similarly they have to comply with KYC and AML legislation

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I’m not sure if you read my post in full. That was precisely my point!

I am certainly not querying complying with legislation. They are saying something completely different to that. And knowing how careful they are with wording, I’m sure this is entirely intentional.

(Of course it might not be which I why I asked if they can clarify.)

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Not how I interpreted it

You might want to read the monzo tone of voice guidelines to see why they don’t use complex, ‘wordy’ or technical terms

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Huh? But I gave two very simple and completely non technical examples to illustrate the vital difference. This is not a tone issue.

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Seems to me it is as they would not use terms like obligated, hearsay etc in a blog

But after the bank holiday maybe someone will clarify this for you. Unless it’s already been explained on the long thread that accompanied this blog when it was released

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Via the Monzo tone of voice:

We use the language our audience uses, and make technical stuff as clear as we can […] We’re friendly people, and we don’t want to come across like a cold, faceless organisation. So use the kind of language you’d use if you were talking with the person you’re writing to, and avoid business-speak.

I think you’re reading into a sentence that is intended to communicate to people who aren’t intimately familiar with the relevant laws, to the layman “requests from law enforcement” means “[legal] requests from law enforcement” – to the layman, there’s no distinction between “legal” and “illegal” requests from law enforcement – and so while your personal history + circumstance means you’d prefer an explicit clarification, that isn’t aligned with the tone used by Monzo and isn’t expected.

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You’ve mis-interpreted the law.

What it appears Monzo are doing here is sidestepping all of this legal accountability . They are saying that they will effectively freeze accounts without any decision being made by a court or judge on the hearsay of law enforcement. This strips away all the protections the law has been at pains to provide you.

They don’t require a judge for freezing accounts. This has been talked about previously. They are not stripping away your financial rights, they are following the law. Monzo like all banks in the UK have an obligation to essentially freeze and report accounts suspected of being a part of money laundering or terrorist financing as they point out.

No judge is required for this, the banks themselves have an obligation to look for these activities and report them.

Is this topic up because Monzo has frozen your account?

Unfortunately nothing you say here changes this simple fact, by law Monzo are required to do these checks and carry out the actions they carry out. This is the same basically everywhere in Europe. In fact the UK has one of the less strict laws and regulations around money laundering in Europe.

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Couple of things.

The police also have to act within the law. You’ve made massive leaps to imply “the police” are corrupt, and don’t know anything about the modern tech world. These two statements are, frankly, ridiculous, and not based in fact.

Also, the FCA is a prosecuting body. It itself is “law enforcement”. It can, and does, act independently of the police in many cases.

You’re overreaching way too much, in my opinion. But if you’re not, thank god you’re around to pick up on all of this criminal intent hidden in plain view, which regulators, law enforcement, government and three million customers have all missed.

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Basically, the law two things:

  1. Monzo have to freeze an account if they are told to by a judge.

  2. Monzo have to freeze any accounts which they think could be being used for illegal activities.

I’m pretty sure the Head of Risk/Compliance is personally responsible for Monzo freezing accounts, so if Monzo don’t freeze any accounts which Monzo suspect are being used for illegal activities then the Head of Risk/Compliance could be held personally responsible and be sent to prison. Monzo would also lose their banking license.

All banks have to do this.

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You err in law @jph .

Sections 330-332 of the Proceeds of Crime Act 2002 (POCA), Monzo is obliged to report any suspicious account activity to the National Crime Agency (NCA).

Sections 327-329 of POCA, if Monzo suspects that the money in someones account might be of a criminal nature Monzo cannot allow them to move or access the money and they must file a Suspicious Activity Report (SAR) to the NCA.

Section 333 of POCA explains that it is a criminal offence to tip someone off about a SAR; that is to notify them that they know or believe that a SAR has been made when to do so is likely to prejudice any investigation. This means Monzo cannot tell the frozen customer about why the account is frozen.

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*All regulated institutions (I.e. FCA regulated)

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Respectfully, lots of people putting words in my mouth here.

I said loud and clear: I am certainly not querying complying with legislation.

Also nobody noticing this is actually a question :roll_eyes: :laughing:

The point I’m making isn’t the legality or not.

In any case, there’s nothing “illegal” about such requests from the police (and I didn’t say anything of the sort), it’s just that Monzo don’t have to do anything about them and their first responsibility should be to customers.

  • They are legally obliged to collaborate with police when police have good and reasonable evidence.
  • They are legally obliged to act on their own when they have good and reasonable evidence.
  • They are not legally obliged to collaborate with police when police have not shown good and reasonable evidence.

It’s not super complicated! :slight_smile:

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Not the scenario I’m talking about. I’m talking about when they have not found anything and when the police request it. The legal situation is quite distinct which is why I spoke about one and not the other.

Nope. Bit of a weird accusation to make :confused:

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I never said anything about police being corrupt or acting outside the law. Please judge my posts on the words I’ve chosen to use.

As already clarified, there’s nothing illegal or incorrect in police making such requests. However, there’s also no reason to follow them until they’ve gone through the proper channels in order to provide a reasonable basis for suspicion.

So far you’ve misquoted me once and not mentioned the other statement you’re replying to. What two statements are “ridiculous”?

As for the claim I “don’t know anything”, based upon your post I’d wager you’ve never seen a RO in the flesh before. The police aren’t often corrupt but they do make mistakes more frequently than we’d like to admit.

[edit: apologise, I see now you made a carry on sentence and were referring to the police not knowing anything rather than me. It is certainly true that a lot of ROs get filed by police misunderstanding financial evidence or being confused by things like crypto - go into any duty solicitor and ask if you don’t believe me]

Again, that’s not the case I’m discussing here and it’s clear that FCA as a regulator is not included under the definition “law enforcement” here (or under the other instruments I mentioned) even if their powers allow specific financial actions. See List of law enforcement agencies in the United Kingdom, Crown Dependencies and British Overseas Territories - Wikipedia

And where are you seeing anything about “criminal intent” and things everyone has “missed”? I’ve said nothing of the sort in my post. Again, please, with respect, it would be much more constructive to judge my posts on the words I’ve actually chosen to use.

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  1. Not really the full story or how the process works and is initiated but close enough for the layperson I guess.
  2. However, this is not the position I’m discussing. We are talking about two separate causes of reasoning for taking action.

I’m also pretty sure that the Head of Risk/Compliance will go on the record to say that they have to have reasonable evidence before taking such action and don’t have a feather trigger finger in order to save their own skin. Again, that’s not how these things work.

Not correct and a strange misrepresentation of what I said: I’m well aware this isn’t specific to Monzo but my point is all banks have to do what I suggested Monzo say, not what Monzo actually said.

Please refer to the bullets above.

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What do you mean I err in law? I have read POCA and CFA you know :laughing:

Bit of an odd post. No part of that remotely contradicts anything that I said!

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There’s been extensive discussion of all these points and questions before. The conclusion I’ve come to from reading all of these threads is that people who take exception to this (legislation and/or Monzo’s explanations of the way they implement it) will not usually be persuaded of the merits of an alternative point of view, whatever evidence or argument is presented. That’s an observation, by the way, based on extensive reading (and sometimes commenting) on these threads, and not a personal attack on any individual. I’m just glad I’m not an MLRO - damned if you do, and on trial if you don’t.

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Ok.

These are your words.

People usual post these kind of posts when their account is suspended, hence the question.

Then why quote Monzo in relation to their obligations?

Monzo aren’t side stepping legal accountability. They are bound by the law regardless of whats written down on their web site.

i will side with you on one thing thing though. Monzo aren’t the best at wording their terms and conditions, so perhaps this could be made clearer, or maybe include the area your talking about more specifically in requests to requests by police and the NCA. But it wouldn’t make a difference in how they act in regards to how the handle accounts, that’s all laid out very clearly by people like the FCA.

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Please could you link to discussion of this one point as I’ve been unable to find any of this extensive discussion you claim exists?

I believe complying with regulation has been discussion but I will repeat myself one more time. I am certainly not querying complying with legislation

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