Monzo Faces £21 Million Fine Over Fake Address Scandal
Digital bank Monzo has been slapped with a £21 million penalty after customers successfully opened accounts using fake addresses including 10 Downing Street and Buckingham Palace. The Financial Conduct Authority (FCA) imposed the hefty fine following an investigation that exposed serious flaws in the bank’s verification systems.
The regulatory probe revealed that Monzo’s inadequate address verification processes allowed customers to register accounts using “implausible” locations across London. These included the Prime Minister’s official residence, the King’s royal palace, and even Monzo’s own corporate headquarters. The bank failed to detect these obviously fraudulent addresses during its customer onboarding process.
The FCA investigation highlighted significant gaps in Monzo’s anti-fraud controls and customer verification procedures. These system failures potentially exposed the digital bank to money laundering risks and regulatory violations. The £21 million fine represents one of the largest penalties imposed on a digital banking platform for compliance failures.
Monzo’s address verification weaknesses allowed fraudulent account openings to slip through its digital screening systems. The bank reportedly accepted applications without properly validating whether customers actually resided at the claimed addresses. This oversight enabled individuals to exploit famous London landmarks as fake residential addresses.
The penalty underscores growing regulatory scrutiny of digital banks’ compliance standards. Traditional banks face similar verification requirements, and regulators expect fintech companies to maintain equivalent fraud prevention measures regardless of their digital-first approach.
