Monzo may have to freeze some accounts under new money laundering rules

I thought banks these days all want to be your friend ?  Traditional and challenger banks alike.  Freezing your money is the "with friends like these you don't need enemies" approach.

What I like from this article is the approach Monzo has taken to solve the problem, focusing on the user

Send a push notification to the customer and being able to verify the identity with a picture of an ID and a video of the customer. (Haven't done it personally, but it doesn't look it will take more that 10 - 20 min to do it)

While traditionally, you would have got a letter from your bank, asking you to go to the branch, you would have to wait in the queue, present your documents, etc...

Will P: Russell - as the story states, this is due to new regulations, not something Monzo have made up.  Given that Monzo is still in Beta and it requires top-up, most customers would not have £2k in there anyway.

Attract customers by promising a more frictionless experience by having lightbrush KYC. Get them to deposit money. Then tell them their account is frozen and ask them to face the additional friction of undergoing full KYC if they want their money back. May seem like cheating to some but Monzo makes PayPal proud.

Good job Monzo. Look forward to many more devious tricks from you.

Customers with less than 2k are affected, according to the article.

New regulations should only apply to new customers.  The existing customers signed up to specific terms, the lighter-weight authentication was a material element of the bank's offering to the market.  Changing the rules like this is a breach of the agreement.

I expect the banks had some influence over how this regulation was formulated, the larger banks at least if not the likes of Monzo.  I'm naive enough to hope they'd stand up for the interests of their customers.

Will P:  Well I can't remember what level of authentication I asked for, but I have not been contacted.  I expect you're right that the high street banks may have iinfluenced this, but probably not the challengers.  May just be a ruse to disadvantage the challengers!

Humm, its called the 4th Money Laundering Directive. It has a wide spread effect including one all banks.