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Barclays promises Monzo workaround following broker complaint

  • 09/03/2023
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Barclays promises Monzo workaround following broker complaint
A broker has expressed confusion that Barclays’ staff on live chat have said that it will not accept Monzo or other online banks as the source of direct debits, directly contradicting the bank’s policy.

Initially reported in Financial Reporter, Jamie Lennox, director at Dimora Mortgages, was keying in an application with Barclays, but when he got to the direct debit section to verify the bank, the system did not recognise the sort code for Monzo on the Bank Wizard button.

Lennox then went onto live chat, where the representative from Barclays said that it did not accept direct debits from Monzo as it was an online bank, adding that it was its policy to not accept online banks for direct debits.

He was told that the client would have use a different bank for their direct debit. Lennox said that the options for the client now were to use a more expensive lender or open a new current account for one direct debit.

Lennox said: “From a company that claims to champion innovation as part of its core values, you have to laugh. Given online banks have the exact same facilities such as direct debit payments, there are zero logical reasons why Barclays shouldn’t be accepting their accounts for direct debits. “

He continued: “As consumers increasingly move their banking to fintech firms such as Monzo, and with many of the big six closing countless branches at the same time, you do have to wonder how many customers they will lose.

“Things like this put unnecessary barriers in front of customers and aren’t really in the spirit of treating customers fairly.”


Barclays responds

A Barclays spokesperson said: “We can confirm that Barclays do accept mortgage direct debits from Monzo bank. This is a rare instance of a sort code being allocated that hadn’t yet been uploaded to our system.

“This prevented us from being able to verify and process the mandate instruction successfully. We apologise to both the broker and their customer for the confusion and inconvenience caused, and are taking steps to resolve the issue.”

The spokesperson added that it accepted direct debits from all UK banks.

(Source: Jamie Lennox)

However, in recent interactions with the live chat function by Lennox following the initial interaction, the staff still maintained that Monzo Bank was not acceptable for direct debit and no digital bank was permitted for direct debit.

The staff member said that the issue was “still under investigation” and therefore Lennox could not proceed with the application

Lennox said that his client’s issue of not being able to proceed with Barclays was still unsolved.

The Barclays spokesperson reiterated that the firm could accept direct debits from Monzo and other UK banks and that colleagues would be reaching out to Lennox to resolve the issue.

Lennox confirmed that the bank had reached out and confirmed that they would subsequently sorted out the issue.

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