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Revolut is facing renewed criticism in the UK in the wake of a BBC investigation into its fraud controls, as the firm’s lack of communication with scam victims emerges as a key concern.
Last week, following a BBC Panorama documentary, Revolut was at the centre of a national media storm, which focused on the firm’s failures to protect customers from fraud.
The documentary, which followed the granting of a UK banking licence to Revolut in July, raised doubts as to whether the firm is ready to become “Britain’s newest bank”.
A key theme of the documentary was Revolut’s disproportionate contribution to the UK’s fraud statistics.
With 10m customers as of September this year, Revolut is far from the UK’s largest bank.
It is almost five times smaller than Barclays (48m), four times smaller than HSBC (42m) and almost three times smaller than Lloyds (27m), but it exceeds all of these high-street banks in terms of fraud complaints.
In 2023, Action Fraud received almost 10,000 reports of fraud in which Revolut was named, according to a Freedom of Information (FOI) request submitted by Panorama.
This was 2,000 more than Barclays and double that of Monzo, a UK neobank that also hit the 10m customer mark earlier this year.
In 2023, data from the Payment Systems Regulator (PSR) also showed that Revolut’s fraud controls are failing to keep pace with both its neobank and high-street rivals.
For every £1m in deposits, the amount linked to authorised push payment (APP) was four times higher at Revolut than at Monzo, and three times higher at Revolut than at Starling.
Lack of communication with victims
William Ayles, co-founder of fraud recovery firm Refundee, spoke with Vixio about what he has observed after working with more than 1,000 Revolut customers that have lost money to fraud.
Ayles, who also appeared in the BBC documentary, said that only a “tiny minority” of Revolut fraud victims that his organisation has worked with ever received a phone call from a human at Revolut.
This includes both during a fraud, when Revolut’s official policy of holding payments while investigating suspicious activity may be expected to kick in, and after a fraud, when the victim’s money has already left their account.
Of course, those who approach Refundee are a biased sample group, as they are all customers who have lost money to fraud and are seeking assistance in obtaining reimbursement.
Ayles said that Refundee has worked with some Revolut customers who received a phone call from Revolut to intervene during a fraud, but he added that this is “not common”.
He also added that phone calls are slightly less rare for Revolut Premium account holders.
His speculation is that this is not because these customers pay more for the service, but because they are more likely to use Revolut as their main bank account, and hence more likely to move larger amounts through it.
Pitfalls of Revolut’s in-app chat feature
As was shown in the Panorama documentary, Revolut does not have a dedicated phone line for customers to report fraud (either during a suspected fraud or after a fraud has taken place).
In one example, the case of a business customer named Jack, it took him 23 minutes to report via Revolut’s in-app chat feature that he was being defrauded.
During that time, the scammers that had taken over his account managed to extract another £67,000 from it, with Jack’s total losses coming to £165,000.
Vixio has since spoken to Charles Land, another Revolut business customer who lost money to fraud, and who struggled to get help when reporting the fraud to Revolut.
“I was sitting in my living room with the family, and small, random payments started to leave my account,” he said. “I thought: That must be a bill — let me check.
“By the time I could check and do anything about it, five more transactions went out, totalling about £450. It was shown in dollars and was converted.”
In this case, an unknown merchant account located in San Jose, California, had processed a series of chargebacks to Land’s Revolut card.
Land reported the fraud to Revolut via the in-app chat feature, and within ten minutes, Revolut had concluded that the payments were authorised by Land’s Apple Wallet account, and could not be disputed further.
Land was later able to disprove this claim with help from customer support at Apple, but could not reopen the dispute with Revolut.
“I rate their fraud protection as absolutely zero, especially since it was a business account,” he said.
“You can't even speak to a person, and I wouldn't be surprised if the answers are automated, so they don't actually have to help.”
When contacted by Vixio, Revolut did not respond to specific claims about the firm’s lack of phone calls to customers that have fallen victim to fraud.
However, a Revolut spokesperson did say that the firm abides by the same regulatory standards to protect customers from fraud as any other high-street bank.
“We use a range of different approaches designed to ‘break the spell of the scammer’, not all of which we communicate externally so as to not jeopardise their effectiveness,” the spokesperson said.
“For example, we delay payments to allow customers to stop, think and complete additional checks.
“We then utilise specialist agents to speak to the customer, either through our secure in-app chat, or through a phone call to uncover potential scam risks.”
So far in 2024, Revolut said its early intervention warnings have prevented almost twice as many customers proceeding with potentially fraudulent transactions compared with in 2023.
This is welcome news both to customers and to Revolut itself, which, under the PSR’s new mandatory reimbursement rules, would now be facing a hefty bill to reimburse every customer that falls victim to APP fraud.
