Revolut Accounts For Nearly Quarter Of Complaints To Bank Of Lithuania

March 27, 2023
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The Lithuanian central bank has revealed a huge rise in complaints received about payment firms, which now account for four out of five of all submissions. By far the biggest culprit is fintech giant Revolut, which accounted for 23 percent of all complaints.

The Lithuanian central bank has revealed a huge rise in complaints received about payment firms, which now account for four out of five of all submissions. By far the biggest culprit is fintech giant Revolut, which accounted for 23 percent of all complaints.

The Bank of Lithuania received more than 1,800 complaints last year, with payments eclipsing all other services. According to the regulator, payment firms accounted for 80 percent of all complaints in 2022, representing an 86 percent increase compared with 2021.

Of which, 423 of these complaints alone were made about neobank Revolut.

The regulator said that most of the Revolut complaints came from foreign nationals and is likely due to the fact that the Bank of Lithuania is now responsible for the company’s EU subsidiary.

Revolut moved its EU base to Lithuania in 2020, when it was granted an electronic money institution licence by the country.

The company is by far the biggest fintech registered in Lithuania, which has a population of just 2.8m. As of November 2022, Revolut had a global customer base of more than 25m.

Why are complaints growing?

"Complaints about payment services have been growing both because consumers are using these services more and more, and because of anti-money laundering measures, as well as sanctions related to Russia's war against Ukraine,” said Vaidas Cibas, director of the Financial Services and Markets Supervision Department of the Bank of Lithuania.

“The Bank of Lithuania considers all received complaints as important signals and takes them into account when planning and carrying out supervisory actions of financial institutions," Cibas said.

The majority of complaints received about payment services were related to payment accounts, and almost one in three of them are related to the termination of business relationships, the regulator indicated.

Meanwhile, another third of the complaints were due to limited access to the payment account, whether due to the account being uncredited or suspended or due to incomplete payments.

In a letter addressed to all payment services providers (PSPs) last year, the Bank of Lithuania dictated that PSPs must improve communications with their customers, particularly related to money laundering and terrorist financing measures.

The regulator advised that “clearer communication”, as well as “closer cooperation” between companies and their customers, could help limit disagreements that are currently proving a problem.

This includes PSPs outlining to customers what documentation is needed, offering support if alternative documentation is necessary and setting clear deadlines for submissions.

This is also the case for communicating with customers if a payment account is limited, or a transaction is suspended.

Here, the regulator cautioned that customers are not being informed in advance or given satisfactory information to help them remove barriers that have been put in place by the PSP.

The regulator also called on PSPs to “simplify” their know your customer (KYC) process. It noted that customers often avoid, delay and/or fail to fill out KYC forms because the customer KYC forms that are provided by the PSP are often large-scale, and not adapted to several groups of customers such as non-profit organisations, students and pensioners.

Revolut had not responded to a request for comment by the time of publication.

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