Invezz.com - Revolut, the digital banking giant, is under scrutiny after being named in more fraud complaints than any other major UK bank last year.
A BBC Panorama investigation revealed that Action Fraud, the UK’s fraud reporting center, received 9,793 fraud complaints involving Revolut, as uncovered through a Freedom of Information (FOI) request.
This figure is approximately 2,000 more than that of Barclays (LON:BARC) and Lloyds (LON:LLOY) and twice the number of fraud reports associated with Monzo, a competitor in the digital banking space.
The surge in fraud reports has raised questions about the effectiveness of Revolut’s security controls.
Despite having more than nine million UK customers and 45 million globally, Revolut was only recently classified as a full-fledged bank in the UK after securing a banking license in July 2024.
This change allows the company to hold customer deposits and offer lending products such as credit cards and mortgages.
However, critics argue that the delay in obtaining the license may have left gaps in Revolut’s ability to handle fraud, especially in light of the rise in digital scams.
Customers criticize delayed fraud response
While Revolut states that it takes fraud seriously, some customers feel vulnerable. One customer, identified only as Jack in the BBC report, reported losing £165,000 from his business account to scammers.
After being tricked into sharing personal information and making payments to fraudulent accounts, Jack immediately contacted Revolut’s in-app support.
However, he experienced a 23-minute delay in reaching the correct department to freeze his account, during which time an additional £67,000 was stolen.
Jack expressed disappointment with Revolut’s security systems, stating that the app failed to flag the suspicious activity, despite a large number of payments being made to a new payee.
His experience has fueled concerns that Revolut’s fraud detection systems may not be robust enough to respond quickly in high-risk situations.
Industry-wide challenges and calls for accountability
The increase in fraud complaints has triggered calls for tougher regulations on digital payment firms.
Rocio Concha, director of policy and advocacy at the consumer group Which? believes the investigation indicates that “some banks and payment firms are not taking fraud seriously enough.”
She urged the government and regulators to enforce stricter measures to protect consumers from scams.
Revolut has acknowledged that a “small number” of its customers have had negative experiences but emphasizes that it prevented over £475 million in potential fraud losses globally in 2023.
The company has also called on technology giants to help tackle online scams, noting that 62% of all scams reported in the first half of 2024 involved Meta’s platforms, including Facebook (NASDAQ:META) and Instagram.
Revolut stressed that addressing fraud requires cooperation across multiple industries, urging Meta to share responsibility in reimbursing fraud victims.