This is one of those instances where different people see different things in the same statement.
https://www.thetimes.co.uk/article/monzo-lends-customers-money-to-buy-its-shares-375nmdc6r
Monzo state in the prospectus for raising £20m, that customers need to have enough money in their accounts to purchase shares. This 'enough' can include their OD if they have one, it goes on to say. Of course we all know that these shares in Monzo are illiquid for now and may always illiquid.
What is does not say is that Monzo recommend or even suggest that customers use their Monzo OD to purchase shares in Monzo. That much is very clear. At this stage of the process only Monzo customers can purchase these shares - it has not been opened up to the public yet. This is all part of the requirement for Monzo to offer existing SHs first bite. And Monzo state that customers must use their Monzo accounts to buy these shares - a solid way of increasing usage. It seems this may all have been misread.
This wording doesn't reflect well on Monzo but the article doesn't reflect well on The Times. Monzo could have been more careful to separate the sentence about buying shares and the one about the OD.
If the prospectus was promoting an offer of a Monzo overdraft to buy illiquid shares in Monzo, then the Times piece would be legitimate. But Im really struggling to make that case by reading what Monzo have actually written.
What would have made and might well make a better article is to ask just how Monzo go about judging if applicants should be given a £1000 OD. We are told that it's really pretty easy to get one and that the 'checking' is largely self assessment. Now that is something to worry about.
Be interested to hear where you heard that last bit from. Most people on the forum seem to complain that they can't get and OD. It is certainly not self-assessment, let alone "largely". Banks don't generally advertise this algorithm anyway, because it opens it up to "gaming". Not even sure if they're allowed to.
ReplyDeleteThis round will only ever open to customers. The fact that you have to use your account rather than the usual CC process is just a way of enforcing that - it has nothing to do with existing SHs, although they also get a 2-day head start.
I notice the journalist has been robustly criticised on Twitter, but is still desperately trying to smear Monzo with more inaccuracies. I wonder what his motives are. I would trust Tom Blomfield over a newspaper any day, but I too am surprised at The Times.
I also thin it is unhelpful to make the points in your last paragraph. The journalsit of a saesoned pro who has IMO misunderstood the message ebing sent out by Monzo. A misunderstanding facilitated by Monzo's very poor wording. One of the deciding factors for me in making a decision that Monzo are not trying it on is that the CEO of Monzo is a decent guy by all accounts. so not likely to take part in sort of shady shit. Likewise the journalist is a well respected one in his field - who wouldnt have a motive for purposefully slagging off Monzo. It is simple misunderstanding. So stop it.
DeleteOldales - direct - so I wonder where you get your info? Of course it's self assessment - how ele would they offer instant ODs? Check your facts please.
ReplyDeleteDirect? I get my info from the company, as a SH and customer. I am also very active on their forum, and attend regular updates at their offices. They do a credit check and then offer you an overdraft by invitation, based on what they are comfortable lending. You can then choose how big you want it up to that limit. There is no element of self-assessment.
ReplyDeleteAs for "misunderstandings", they should be followed by an apology, but instead he's still digging. Any customer of any bank could go overdrawn to buy their shares. Monzo have never encouraged this - in fact quite the opposite.
Not sure why you can't imagine a journalist having a vested interest, however seasoned.
Either way the implication that it is irresponsible of monzo to allow someone to go overdrawn if they use that money to buy shares that may be worthless in the future is a bit odd.
ReplyDeleteOn the same basis it is more irresponsible of monzo to allow someone to go overdrawn buying food as that definitely will be worth nothing in a few days.
Perhaps the times should not allow itself to be purchased by those who are overdrawn.
Brilliant :))
DeleteYou are sounding a little ridiculous. Dirct as in someoen whi has a OD with them. Do you really think credit checks are reliable and do not use self assessment? By invitation - hahaha you have fallen for the PR.
ReplyDeleteMonzo's wording is misleading and inappropriate for a 'bank'. The article is also misleading and IMO inappropriate for the The Times.
In this case there is no reason for the journalist to have a vested interest. Surely you can understand that. If not we have very little to discuss.