Apparently, if a transaction is flexed and split into multiple payments, even if the transaction is then refunded within the same billing cycle it would still be charged interest nevertheless and there is no option to change instalment cycles anymore as according to Monzo “The refunds are technically a payment towards an instalment”.
I am not even sure if this is legal? I’ve paid for something and didn’t care to split it into three because I was sure the transaction will be refunded in a day or two as it didn’t go through.
But I’m being charged interest because Monzo has a different way of defining refunds as technically payments? I can understand if the refund was after the billing cycle but it’s not.
Does anyone have anything to pitch in here? I really think Monzo has a very bad implementation of Flex Refunds.
Also strange that as referred in a previous issue, I cannot choose a Flex transaction while contacting support and have to go through hoops to talk about a flex transaction.
Although the amount of interest charged is negligible, I wanted to raise this as it could potentially be an issue at large?
Attachments:
Transaction page showing instalments and interest.
That’s because Flex is a BNPL product manifesting itself as a credit card* - and works differently to the more traditional ones.
To prevent this in future, I’d suggest you choose an installment plan that’s interest free even if you know you’re going to get a refund. Or, get a more traditional Credit card where you just need to pay off in full before the next billing date.
It’s legal, as I understand it, but this is why I also don’t see Flex as an option CC wise - it’s too much faff for me.
So, in my case since the loan has been split into multiple instalments for a while until my refund was issued, I’ll be charged the interest even if the transaction has been refunded before the billing cycle is complete?
Like you said this is different from how other credit card providers handle refunds issued within the same billing cycle if I’m not wrong?
Umm except that, the refund was issued on to the same card? Saying monzo’s got nothing to do with it is a bit of a stretch isn’t it? Also, since Flex was marketed as a credit card rather than a BNPL product, it was safe to assume it’ll be handling refunds within the same billing cycle like other credit card providers do?
Also, even so, this whole interest with refunds thing could be avoided if Monzo offered an option to change instalments for purchases within the same billing cycle (even if refunded) right?
Yes I’ve seen the same issue on another payment where it was fully refunded and like others said I understand the partial refund was due to the foreign currency rates fluctuations.
But my point is that, even though it was considered a partial repayment, shouldn’t Monzo offer an option to change the instalments as it’s still within the same billing cycle?
Yes, my point was more about Monzo not allowing to change the number of installments even if it’s within the same billing cycle only because it was refunded.
Yes, I can understand this as this would be exactly what would happen in the case of PayPal credit or Klarna.
But I believe they still offer to change the instalment plans if still within the first billing cycle irrespective of whether a payment is made towards the purchase or not?
My question is really about why the payment instalments can’t be changed and shouldn’t the user be allowed to change if they’re still within the same billing cycle? Seems counter intuitive.
Ah, I guess my issue wouldn’t definitely fly with the Borrowing team
But I definitely think users need to be able to change their instalment plans before the same billing cycle ends. Irrespective of whether a refund/partial payment was made or not.
Just so that everyone’s clear, the remaining payment part of £0.94 isn’t just the difference between the payment and the issued partial refund (due to currency fluctuation). It also includes an element of interest £0.19.
+Original payment - £128.86
-Refunded - £128.11
+Remaining - £0.75
+Interest at 26% - £0.19
Due = £0.94
And there is no way to change the instalments for the borrowed £0.75 nor the total £128.86 because of the partial repayment albeit it’s within the same billing cycle.
You borrowed money for a few days, the charge is legitimate.
Life isn’t the free ride people want it to be sadly.
It’s in the terms you cannot change your plan down to interest free in your favour should you change your mind in any form, including refunds after 4 days.
Instalments can be changed within the same billing cycle as many times as I want.
Instalments cannot be changed after the first payment has been made.
This behaviour is based on the fact that in Monzo,
Refunds are considered as a payment towards the transaction.
Refunds lock the instalments as is.
So, how’s the user expected to know this without experiencing it first hand? As long as the user hasn’t made a payment towards the transaction why wouldn’t they assume they should be able to change the instalments on it? After all it’s still in the same billing cycle?
I dedicate the 4th of every month to Monzo and my finances and pay off everything, select instalments as needed as per my budget. This was based on the two points Monzo explicitly have informed me.
Refunds being considered as partial repayments made by the user is news and in fact not informed explicitly?
The fact you got a refund shouldn’t have any bearing on the “changing installments” part. The minimum monthly payment for any Flex transaction (as far as i’m aware) is £2 (excluding final payment), so you can’t “split” the 74p that’s left (minus interest).
I’ve had partial refunds on Flex before, and still been able to adjust my installment plan afterwards because my monthly payments were still more than £2.
Yes, as long as it’s before the first payment being made I can go back and forth between different number of instalments for an unlimited number of times.
The mentioned restriction is after the first payment has been made. i.e., after the billing cycle is complete and a payment is made, we can choose longer instalments and be charged an interest but cannot go to shorter instalments.
