Revolut is under a spotlight of scrutiny following an investigation into fraud vulnerabilities connected to the UK fintech by BBC Panorama.
Just days after describing the new Authorised Push Payments (APP) fraud reimbursement regulations “as baby steps” and calling for “giant leaps forward”, Revolut has come under fire from customers who believe its systems have failed them.
The BBC Panorama investigation centres around Jack’s experiences, a customer of Revolut who runs an international business. Jack (who didn’t disclose his surname) told the BBC that he was the victim of a scam worth up to £165,000 by scammers who pretended to be Revolut.
The former customer of Revolut was tricked into handing over enough information to allow the scammers to put his Revolut account onto their device, which they later used to set up three new payees.
When Jack realised that he had been scammed, he said that it took 23 minutes to reach the right department that could freeze the account, during that time he lost £67,000. Additionally, he believes that Revolut should have reacted to suspicious behaviour sooner.
Jack stressed to the BBC that the fact that 137 individual payments were being made to three new payees in the space of an hour, should have raised concerns with Revolut.
At this time, Revolut says it cannot comment on Jack’s case as it is being looked at by the Financial Ombudsman Service.
Growth before safety?
Gathering further perspectives, BBC Panorama spoke to eight former employees of Revolut.
One who wished to stay anonymous told the BBC: “Protecting Revolut from being used for financial crime always played second fiddle to the desire to launch new products and to get existing customers to use products more.”
The UK-based fintech has enjoyed significant growth over the past few years, recently celebrating more than 45 million global customers. This growing customer base is also generating substantial income, with Revolut tripling its revenue in 2023.
Nevertheless, Revolut emphasises that it takes fraud prevention incredibly seriously and has “invested heavily” in its financial crime prevention team.
This isn’t the first time people have scrutinised the fintech, however. In July, Bloomberg reported that Revolut had denied thousands of UK customers’ requests for reimbursement after being defrauded by scammers.
However, this won’t be able to happen from now on due to the APP fraud reimbursement regulations, which come into place on 7 October. These regulations obligate payment providers to reimburse victims up to £85,000, sharing this reimbursement 50/50 between the sending and receiving firm.
That being said, Revolut has been very vocal against these regulations. A major concern to Revolut is the lack of accountability for social media platforms, which it believes most APP fraud cases originate from.
Woody Malouf, Head of Financial Crime at Revolut, remarked: “These plans are baby steps when what the industry really needs is giant leaps forward.
“Victims and financial institutions still ultimately bear the cost. These platforms share no responsibility in reimbursing victims, and so they have no incentive to do anything about it. A commitment to data sharing, albeit needed, simply isn’t good enough.”
These allegations come at a key time for Revolut, as the fintech is on its way to becoming a fully-fledged licensed bank. Currently, it holds a provisional licence, which it acquired last July.
To learn more about the recent APP fraud regulations, click HERE to listen to Payment Expert journalists discuss the rules and share their opinions on whether it will curb fraud or only increase it.
