Revolut Sees Jump in Scam Complaints as APP Fraud Grows

Revolut enjoys the distinction of being the most valuable FinTech in Europe.

But as a report Wednesday (Sept. 11) by Bloomberg News points out, the company has also been saddled with a less desirable title: it leads its competitors in complaints about authorized push payment (APP) scams.

These are scams in which fraudsters dupe their victims into transferring money to an online account beyond their control. Last year, Bloomberg notes, Revolut began to show greater pushback on requests for reimbursements from thousands of victims.

Data from the United Kingdom’s Financial Ombudsman Service says this triggered a wave of customer complaints, more so than the ones made about all other U.K. competitors combined.

According to Bloomberg, Revolut has increased its anti-fraud efforts. The company has a seat on the advisory board of Cifas, the U.K. agency that fights economic crime, and has bolstered advertising on its security features. And Revolut’s lead anti-fraud executive has even given evidence before an inquiry by the British Parliament.

The report also points to recent comments by Revolut U.K. CEO Francesca Carlesi, who argues there is external “misperception” around the company’s approach to fraud.

“We have a duty and moral obligation to be a pioneer to fight fraud,” she said, adding that the company considers the problem a “national emergency.”

Last month, the U.K.’s Payments Systems Regulator (PSR) issued a report showing that APP fraud rose in volume last year, from 224,603 in 2022 to 252,636 last year, a 12% increase. However, fraud cases also declined in value by the same amount, coming to nearly 341 million pounds ($433 million) last year.

“We can see some positive changes with more victims being reimbursed than in 2022,” David Geale, the PSR’s managing director, said in a news release.

“But there is still more to do — particularly for some smaller firms which have much higher rates of receiving fraud than larger firms.”

New rules set to go into effect next month will require firms to reimburse the victims of APP fraud, though for a lower amount than initially planned.

The PSR’s original reimbursement plan would have required British banks and payments firms to reimburse victims of scams up to 415,000 pounds ($544,000).

Last week, the regulator lowered that threshold to a maximum of 85,000 pounds, after saying its studies had shown that a vast majority of APP cases involved thefts closer to that amount.

“We listened to concerns about the reimbursement limit and committed to collecting more evidence to inform our approach,” said Geale.

“As a result, we are now consulting on a limit that still covers the vast majority of authorized push payment scams and strikes the right balance.”