Report: Revolut Leads UK Scam Complaints Amid APP Fraud Surge

Revolut has reportedly denied thousands of British customers reimbursement requests after they were defrauded.

This has led many of these consumers to seek help from the U.K.’s Financial Ombudsman Service (FOS), Bloomberg News reported Saturday (July 20).

The report cited data from the FOS showing that Revolut saw a 35% jump in new fraud complaints from customers in the second half of last year, the most recent period for which fraud figures are available. That’s more than any of its rivals and British lenders, and is happening as the U.K. is waging a battle against authorized push payments fraud, or APP fraud.

Data from the FOS provided to PYMNTS showed that the regulator received 2,208 complaints related to Revolut in the second half of 2023, more than half of them involving APP fraud. During the first six months of last year, the regulator received 1,630 complaints, 629 of them involving APP fraud.

This is a type of fraud that happens when scammers trick consumers into sending a payment to another account outside their control. Regulators in Great Britain are set to roll out new rules requiring banks and FinTechs to reimburse victims of these scams. The industry contends the new rules will be expensive and ineffective.

“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 organized criminals, incredibly seriously,” the company said in a statement provided to PYMNTS.

“We have robust protections in place for our millions of customers and analyze 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.”

PYMNTS examined the U.K.’s APP fraud proposal earlier this year, arguing that the policy “put banks and payment firms in a tough spot.”

“The new liability placed on them incentivizes them to take measures to minimize the occurrence of such fraud, and to protect themselves from potential losses, banks might opt to revoke or restrict the option for consumers to make authorized push payments — inconveniencing their customers and restricting their ability to make payments at the same speed as their peers in other countries,” that report said.

According to the Bloomberg report, a representative for the FOS said the regulator has investigated thousands of cases in recent years, helping return more to victims.

But while the FOS ordered Revolut to reimburse customers in nearly half the cases it reviewed and closed, additional data from a pair of law firms representing the Revolut’s customers show the FinTech has continually denied customers’ claims.

British consumers have more complaints about the banking sector across the board than they did a year ago.

Earlier this month, the FOS issued a report that said complaints about fraud in the banking sector were at their highest level in at least a decade.

In total, the number of complaints leaped from 61,995 in financial year 2022-23 to 80,137 in financial year 2023-24, the report said.

“It’s always concerning when you see cases rise so significantly, particularly when so many people are struggling in the current economic climate,” Abby Thomas, CEO and chief ombudsman of the FOS, said in a news release.