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Monzo launches trio of new security controls to combat fraud

Aiming to tackle the escalating issue of financial fraud in the UK, Monzo has introduced three innovative security controls designed to safeguard customers’ transactions. Known Locations, Trusted Contacts, and Secret QR Codes promise to add robust layers of protection, ensuring peace of mind for users making significant transfers or withdrawals.

These measures are part of Monzo’s broader strategy to protect customers from evolving fraud tactics.

  • Marina Mouka
  • July 2, 2024
  • 3 minutes

Monzo, the UK’s largest digital bank, has unveiled three new security controls. These measures, known as Known Locations, Trusted Contacts, and Secret QR Codes, are designed to provide an additional layer of protection for customers making large transfers or withdrawals.

These new controls are part of Monzo’s broader strategy to protect customers’ finances and respond to evolving fraud tactics. The bank’s efforts come amidst increasing financial crimes such as phone theft and impersonation scams, which have caused substantial losses in the UK.

According to recent crime statistics, phones are now stolen more often than cash and credit cards, with victims losing £136.2 million to impersonation scams last year alone.

The Known Locations feature allows Monzo users to specify trusted locations, such as their home or workplace, where transactions can be safely conducted. If a transaction is attempted outside these pre-approved locations, it will be automatically blocked. This geographical safety net aims to prevent unauthorized transactions, particularly those resulting from phone theft or shoulder surfing.

As Priyesh Patel, Senior Staff Engineer at Monzo, explains, “As fraudsters become more and more sophisticated we’re continuing to invest to outpace their tactics and keep our customers’ money safe. Whether it’s choosing your safety radius with Known Locations or having a trusted contact sense-check your payments before you make them, these features offer customers peace of mind and force a much-needed moment of pause in a high-stakes situation. With best-in-class technology, security experts and a priority to prevent fraud at the source, these controls are great additions to our security toolkit, with much more to come.”

Trusted Contacts introduces a social validation step into the transaction process. Customers can invite a trusted friend or family member who also uses Monzo to verify transactions that exceed a certain limit. This additional layer of scrutiny helps to prevent fraudulent transactions by involving someone the customer trusts.

Mark Tierney, CEO of Stop Scams UK, praised this innovation, stating, “Monzo’s new safety controls are a hugely welcome innovation that will help keep people safe against fraud. The emotional impact of fraud, alongside financial loss, underscores the importance of Monzo’s proactive approach. By leveraging technology and expertise, these controls aim to stop fraudsters in their tracks before they can inflict harm and ruin people’s lives.”

The Secret QR Codes feature provides customers with a unique QR code that must be scanned in the Monzo app to authorise significant transfers. This code can be stored on a separate device or printed, ensuring that even if a phone is stolen, unauthorized transactions cannot proceed without the QR code. This dual-device requirement adds a robust layer of security, making it significantly harder for fraudsters to execute unauthorized transactions.

The new controls follow the launch of Monzo’s Call Status tool which tackles impersonation scams by letting customers check in-app whether they’re on the phone with Monzo or not. Monzo’s Call Status tool has been used to report over 4,000 fraud attempts so far this year.