New details emerge on Revolut fraud complaint deluge
New data given to Which? by the Financial Ombudsman Service (FOS) has revealed that bank transfer scams, where victims are tricked into moving money to a scammer's account, are related to a large number of fraud complaints it considered from Revolut customers last year.
In April, we revealed that Revolut dominated the Ombudsman's scams workload in 2023. It issued more fraud views (initial judgements which can be appealed) about Revolut firm than any other provider, including the UK's big retail banks.
Here, we take a closer look at the types of fraud these initial judgments related to and what to do if you're the victim of a bank transfer scam.
What the new FOS data shows
If you can't resolve a complaint with a financial services firm, you can take it to the Financial Ombudsman Service (FOS). Fraud and scam victims typically complain to the FOS when they have requested reimbursement and their provider has declined.
Data provided to Which? by the FOS in April revealed that it issued 3,458 fraud and scam-related 'views' (a judgment which can be appealed) to Revolut and its customers in 2023 – the most fraud views issued for any provider.
The FOS has now revealed that 46% of these initial judgements about Revolut related to bank transfer scams (known as authorised push payment or APP scams) in which victims are tricked into sending money to a scammer's account; 44% of these APP complaints were upheld by the FOS's initial judgement.
The remaining 54% of Revolut fraud judgements concerned all other types of fraud, which could be around issues such as unauthorised payments, identity fraud and card payments made to bogus websites.
People complaining about these other types of scam were slightly more likely to have their complaint upheld by the FOS's initial decision: 48% found the FOS agreed with them that Revolut had acted unfairly.
The FOS has cautioned that the figures above are unpublished and therefore have not undergone the same rigorous process as published data.
Why is Revolut getting a high number of scam complaints?
Technically an e-money provider, Revolut still lacks the UK banking licence it has sought for the past three years, which means it can't lend money, and money held in its current accounts isn't covered by the Financial Services Compensation Scheme (FSCS). Savings are covered.
It's unclear exactly why such a high number of fraud and scam complaints are flowing to the FOS from Revolut customers, and the firm hasn't offered an explanation.
However, it has strongly rejected a claim made by fraud claims firm CEL Solicitors to both the FOS and the Parliamentary Treasury Committee that it's systematically denying liability in almost all APP fraud cases and allowing them to flow to the FOS.
A Revolut spokesperson told us: 'Each potential fraud case concerning a Revolut customer is carefully investigated and assessed independently of other cases. We also revisit liability considerations as a result of complaints wherever any errors are identified during the complaints review.
'Revolut takes fraud and the industry-wide risk of customers being coerced by organised criminals incredibly seriously. We have robust protections in place for our millions of customers and analyse over half a billion transactions a month.
'Our security features include AI models, over 4,000 trained anti-financial crime professionals as well as experienced data scientists. In 2023, we prevented over £475m of potential fraud against our customers.'
Why does it matter if the FOS has to deal with complaints?
The FOS can compel firms to reimburse their customers if they're judged to have failed to safeguard their customers' funds adequately.
It can also order that credit reports be restored (for example, in the case of identity fraud) and can determine compensation payments for distress and inconvenience caused by firms' poor handling of fraud complaints.
It's free to bring a complaint to the FOS, but the service can take several months to consider your case, during which time scam victims could be left struggling to pay for basic living costs.
It's also possible that fraud victims who are unaware of the FOS – or don't understand how it works – could give up after being rejected by their bank.
The FOS told us it wouldn't comment on individual firms. However, a spokesperson told us it 'expect[s] [firms] to investigate the complaint thoroughly before they respond to their customer'.
The spokesperson added that the FOS was receiving and resolving more than 500 fraud and scam complaints a week and had returned more than £150m.
- Find out more: how to take a complaint to the Financial Ombudsman Service
Revolut's record on receiving fraudulent funds
Revolut's record on fraud has been under the spotlight in recent years.
In 2022, slightly more than £1 in every £1,000 of transactions received by accounts at Revolut were the proceeds of APP scams.
Revolut's APP fraud rate by value for 2022 is higher than that of any fully licensed UK bank and much higher than any of the 'big four' UK banking groups: Lloyds, Barclays, HSBC and NatWest.
It's also higher than that of other big name 'challenger' providers, including Monzo, Starling and Chase.
It was the seventh-biggest receiver of fraudulent funds per million of pounds processed once all payment providers were taken into account.
From October this year, virtually all banks and payment firms (including Revolut) will be required to reimburse APP fraud victims in the majority of cases, but it's unclear to what extent providers are prepared for this significant change.
- Find out more: sign up to the free Which? scam alert emails to keep one step ahead of the fraudsters
What to do if you're the victim of a bank transfer scam
If you think you’ve been scammed, you should call your bank or card provider immediately. Tell your bank what happened, and provide it with the account number your sent the payment to.
You should also contact the bank you sent the money to and let it know the account number, as it may be able to halt the transfer and get your money back.
Many banks are signed up to the Contingent Reimbursement Model Code for APP scams (the CRM Code). Under the code, banks have to take a number of steps to protect customers and reimburse those who aren't to blame for the scam.
While getting your money back after being scammed is simpler if your bank is signed up to the code, don’t lose hope if they’re not. There are still options available to you. Use our guide on what to do if you fall victim to a bank transfer scam for advice on what to do next.
