Current account limits insufficient for extraordinary purchases

What risks do they have to take on?

Money laundering is the first one that comes to mind. A few different types of fraud.

This is a good read: Monzo tackles fraud

If they set smaller limits of what you can send out of your account it’s less attractive to people who carry out these activities. And if they did and it was the full £10K Monzo may only loose that amount maybe?
That’s how I see it working anyway.

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How come it’s Monzo who loses out though? If someone places 20,000 in a Monzo account and then moves it somewhere else it was never there money. Confused how it works.

It’s due to legislation that makes Monzo (and other banks) responsible for policing money transfers to ensure they’re not used for money laundering.

We looked into it a while back. Info here.

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I guess what I’m asking is, if it was money laundering, what does Monzo have to do financially?

I’m not sure I understand the question. All banks are obliged to report a suspicion of money laundering - and to freeze assets if there’s a suspicion - it’s more the legal aspect (particularly personal responsibility) that drives behaviour. I’d need to go back and check the legislation to see if Monzo is financially exposed to money laundering…

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The reason I ask is because a reason someone gave for Monzo having a smaller limit compared to other banks was they had less money to throw around.

When I asked what risks, an answer was money laundering. I wondered what financial implications this would have.

Yes the larger banks have more money, but it’s all someone’s money ultimately. If I move £10,000 or £100,000 out of my account with Monzo it’s still my money in my account if you catch my drift.

Oh that I can’t answer. I’m not even sure that a smaller limit (for overdrafts, spending, transfers?) directly relates to money laundering.

What I do think (and it’s just a personal opinion) is that Monzo is a new bank and doesn’t want to be heavily exposed in terms of lending risk. This drives more prudent behaviour (and might be indirectly related to risk associated with money laundering…)

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FCA guidelines are: https://www.fca.org.uk/firms/financial-crime

Basically they say: “adequate policies and procedures sufficient to counter the risk that they might be used to further financial crime”

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This is general guidance from the regulator - which is good.

If we’re talking about anti-money laundering (AML) legislation the details are here:

https://www.legislation.gov.uk/ukpga/2002/29/section/330

Commentary here: Trustpilot Reviews

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Today I tried to pay a credit card bill higher than the daily limit. Rather than saying this, i got an error saying something like “An error has occured”. I then guessed what was wrong and reduced the payment, but could this error be a bit clearer?

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Hey guys,
Really happy full Monzo customer here, but I just had my first negative Monzo experience trying to pay for a £550 car repair bill when the mechanic didn’t have a card machine. I think there absolutely needs to be a way for full Monzo customers to set permanent higher cash withdrawal limits. Annoyingly I had to transfer the £150 which was above my £400 limit to my Barclays account and withdrawal it that way. I dislike traditional banks and want to only use Monzo. So could this definitely be looked at as a change to be made. £400 in London is not a lot of money for those larger one-off purchases

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I agree that with mobile access to our accounts, the card withdrawal limits can seem like a relic of the past. It would be useful to have a workable solution to this problem.

Having said that, the UK can anyway seem like a strange country in this regard. Cash is really not used as much as in other countries, and I’ve always found it amusing how staff in Sainsburys closely scrutinise even £20 bank notes on those rare occasions I pay with one. I grew up in Switzerland, where using a CHF 200 note (currently around £150) to buy a newspaper wouldn’t even raise eyebrows.

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But what would you have done if this was your old bank and there were not near by branches or it was closed?

You’d still have the same type of limits with that bank also…

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True, which is one of the reasons I have debit cards and accounts with several banks.

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I’ve just tested the process for large payments and it worked.

I needed to make a large payment, and though I could have split it over several days, it seemed like a good idea to assure myself that the process was robust and could be relied on in future - which would be essential in the run up to any future decision to close my legacy bank account.

  1. I used the in-app chat to request that my limits be extended
  2. I was then asked for details that would confirm I am really the account holder, and details of the payee and payment itself
  3. I then had to wait around 16 hours for the Monzo crew to perform their checks and increase my payment limit for that day

The process worked well. Worth mentioning that after I first attempted to send Monzo my in-app message, I didn’t get a reply - and the the message later appeared not to have been sent, which was the source of some delay. However, I suspect this was an error on my part.

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Hey @Justin,

Sounds like you possibly did the same as me here - When you first hit send, it doesn’t actually send… You then have to hit send again on the next screen with the CS agents on (if memory serves).

Good to know the rest worked for you!

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This is really confusing - sorry about that :disappointed:

With Monzo Chat, we are reworking how these flow will work so we should be able to fix this :+1:

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I would call them and they raised the limit for 24 hours - I did £2,000 several times

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