Monzo changed my overdraft limit - no warning

I had an £800 overdraft, I had nearly maxed this out this month due to unforeseen circumstances with my car but even on occasions when I do dip into it quite a lot, my salary always pays it off. I want to end the cycle of living in my overdraft so I came to an arrangement with Monzo for them to reduce the limit by £15 a month until I can afford to pay more off it. They agreed this. This was in august. In September they told me the date I was due to pay was nearing and I had to pay something like £300 to cover the costs. I queried this and got told it was a mistake and the £15 arrangement will now begin October 1st. Fast forward to Tuesday, my overdraft limit has been reduced from £800 to £535. Absolutely no warning, no agreement on my part. I am aware banks can terminate overdrafts but I was under the impression they had to give you written warning? I am now in an unarranged overdraft incurring fees. I am due a payment tomorrow of child benefit which will get swallowed up and leave me with nothing. Surely this isn’t correct? I queried this as soon as it happened earlier in the week and despite chasing numerous times I just keep getting told it is being looked into. Not good enough. Once this is over I will be leaving.

Did you at any point re-apply for the overdraft?

Sadly nobody here can help you and you’ll have to wait for support to give you a firm answer.

Do you have it in writing for the changes you agreed to?

I haven’t reapplied or even changed my overdraft limit. I did originally have a £1000 limit but then that changed to £800. Maybe because I didn’t use it I’m not sure but I didn’t do that manually.

I appreciate nobody can help me on here, I’m just so frustrated! I have my agreement in writing but only over the monzo chat facility but it is all there on the chat history. They even re-confirmed the £15 a month agreement after the first cock up when they said I needed to add more than that to cover the upcoming payment. At least they didn’t actually take any money that time!

That’s perfect.

Message them and they will be able to scroll back and see it - you can also request a copy too :slight_smile:

Another thing perhaps is could you have received an email warning you in your junk email folder?

Could be worth checking.

With these sorts of things i do think common sense will prevail, monzo seem to be accommodating where possible so im sure if you get in contact theyll revert this back to the agreed terms or at least give a better reason for the sudden change as theres no real point us speculating on in here and just presuming the worst.

there’s something that banks don’t tell their customers and it’s called “ FIRST RIGHT OF APPROPRIATION” where you can tell the bank what to do with the money it received here’s an example and hope this can help until things are sorted
Dear Sir / Madam,
Re: (Insert name, address and account number)

I enclose a cheque for £500 for credit to my account number xxxxxxx / my wages will be paid into my account on (Insert Date). I am exercising my first right of appropriation over these funds and wish you to pay the following items from them:

£200 Cheque number xxxx payable to ‘Cash’ to cover my living expenses.
£160 Cheque to Mr Rivers to cover my rent.
£40 Direct Debit to Phone Co on 5th August

£20 Direct Debit to NPOWER on 6th August.

This should ensure payment of the items listed. Where there is anything left over the bank will use it as it sees fit.

Where the same instructions are to be repeated every month, a sentence could be added to the letter stating ‘these instructions are to be effected every month until further notice’.

N.B. Remember to keep copies of all correspondence with the bank

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From Legal Beagles:

Using your right of appropriation will quite often be a signal to the bank that you are struggling financially, which can lead to removal of facilities and downgrading of accounts to basic. They should not do this without discussion and notification first. They are, in essence, quite right and needing to appropriate your income in this way can be a sign of impending difficulties.

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it’s a temp solution so your bills get paid without any problems before the bank swallows it up until they sort their mess out

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Out of interest what is the benefit of asking Monzo to reduce your overdraft limit each month?

Why not just aim to be £15 less in your overdraft each month? And the cancel it, if you no longer want it…

By asking them to intervene, I would imagine it leads them to think you are in financial difficulty which is not a good place to be in the economic environment.

It also makes your credit utilisation look higher which is based for your credit record.

Overdrafts are repayable on demand so you’re somewhat lucky Monzo are not asking for the full sum now.

The interest rate on arranged and unarranged overdrafts is the same.

As others have suggested, there are rules saying banks should not be using benefits payments for bank charges if you need that money to live on.

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I guess it’s “aim to be” vs “have to be”

£15 left and you’re hungry, you might get a takeaway instead of cooking, but if there’s no option, you can’t spend.


Hi Shannon,

I’m so sorry. We’ve let you down badly here and I completely understand your distress.

I’m an engineer in the Borrowing team and I’ll make sure we complete the process to fix our error as early as possible tomorrow.

Once it’s resolved, I’d also like to come back here to explain a bit more about what went wrong, and the steps we’re taking to make sure it doesn’t happen again.


A quick update:

  • Most importantly, we’ve now fixed OP’s account :relieved:
  • I do still plan to write up some more detail, but it will be early next week now

Once it’s resolved, I’d also like to come back here to explain a bit more about what went wrong, and the steps we’re taking to make sure it doesn’t happen again.

Alright, here’s a bit of a debrief on what happened and what we’re doing to prevent it in future. I’m going to keep it general rather than address the specifics of any case :slightly_smiling_face:

We offer several plans to help people manage their overdraft

Sometimes this is because folks are experiencing financial difficulty, but it can also be to provide some structure when they want help to reduce how much they’re using their overdraft :chart_with_downwards_trend:

Each of these plans is powered by a schedule of ‘target balances’. E.g. you might have a plan that reduces your limit in £50 increments, and looks like this:

  • Today: Limit of £500
  • 01 Oct: Reduce to £450
  • 01 Nov: Reduce to £400
  • Etc…

We generally set these plans up to start from either your current overdraft usage or your overdraft limit, usually based on what you ask for. But sometimes there’s confusion, or we make a mistake and use the wrong starting point.

We’re doing two things to make this better in future:

  1. In the immediate term, we’ve reminded COps how important it is to make sure we use the right value
  2. We’re also planning a small improvement to our COps tooling in the next few weeks, to help COps choose the right starting value every time :relieved:

We found a bug recently which stopped some planned reductions happening

This was unfortunate. Normally we would have received alerts as soon as this went wrong, but in this specific case these alerts were suppressed, so it took us longer to realise this was happening than we’d have liked :grimacing:

When fixing this bug, we decided to apply any reductions that were due on active plans while the bug was present.

Unfortunately, we didn’t account for plans that were:

  • Set up incorrectly
  • Active while the bug was present
  • Subsequently cancelled

This meant - in a very small number of cases - we reduced limits according to a now-cancelled plan. It was “technically” correct, because the reduction would have happened were it not for the bug. But it was definitely not the right outcome for people in this situation and we’re very sorry for causing these customers any stress and confusion :disappointed:

We’ve already changed the part of the system that reduces limits, to make sure it won’t do so again if a plan is not still active :white_check_mark:


I still love how you are still so open when things like this happen!


Thank you for taking the time to explain. It really does make a difference and I appreciate it. I would also like to thank you for the gesture of goodwill I received as well. The customer service I received has restored my faith in your bank!:slightly_smiling_face:


Really great to see this level of participation in the forum from Monzo. Hopefully we’ll see more of this - it’s exactly what I would want to see from a modern bank.

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Shows how this forum can be a helpful place still.


Glad Monzo have sorted it for you!

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