Revolut, the most valuable FinTech in Europe, is grappling with a significant rise in complaints related to authorized push payment (APP) scams. This increase in fraudulent activities has led to concerns about the company’s handling of such incidents. The surge in complaints has also prompted Revolut to bolster its anti-fraud measures and emphasize its commitment to combating economic crime. Despite these efforts, the company continues to face scrutiny from both customers and regulatory bodies.
Revolut’s challenges with APP scams have escalated over time. Earlier reports highlighted the company’s proactive stance in reimbursing fraud victims, but recent data indicates a reduction in such reimbursements. This shift has caused frustration among users who feel inadequately protected. Additionally, while Revolut has significantly improved its security features, the rise in scam complaints suggests a gap between the implemented measures and their effectiveness. Comparing previous and current data reveals a complex scenario where increased security efforts seem insufficient to curb the escalating fraud.
Increased Anti-Fraud Efforts
Revolut has actively enhanced its anti-fraud initiatives in response to the growing number of scam complaints. The company holds a position on the advisory board of Cifas, a key agency fighting economic crime in the UK. Furthermore, Revolut has intensified its advertising campaigns to highlight security enhancements. The lead anti-fraud executive at Revolut has also provided evidence during a British Parliament inquiry, underscoring the company’s dedication to addressing fraud issues.
Data from the UK’s Financial Ombudsman Service reveals that Revolut leads its competitors in customer complaints regarding APP fraud. These scams involve tricking victims into transferring money to accounts controlled by fraudsters. Last year, Revolut began resisting reimbursement requests, triggering a wave of complaints. The Financial Ombudsman Service data reveals that complaints against Revolut surpass those against all other UK competitors combined.
Regulatory Actions and Changes
The UK’s Payments Systems Regulator (PSR) recently reported a 12% increase in the number of APP fraud incidents, although the total value of these frauds decreased by the same percentage. The regulator has introduced new rules requiring firms to reimburse scam victims, albeit at a lower threshold than initially planned. The reimbursement limit has been reduced from 415,000 pounds to 85,000 pounds, aiming to balance coverage for most scam cases with practical enforcement.
Revolut UK CEO Francesca Carlesi has addressed the external perception issues regarding the company’s fraud approach. She emphasized the company’s moral obligation to lead the fight against fraud, describing the situation as a “national emergency.”
“We have a duty and moral obligation to be a pioneer to fight fraud,” Carlesi said.
The PSR’s managing director, David Geale, acknowledged the positive changes in victim reimbursement rates but emphasized the need for continued efforts, particularly among smaller firms with higher fraud rates.
“We can see some positive changes with more victims being reimbursed than in 2022,” Geale stated.
As APP fraud cases continue to rise, Revolut remains under pressure to enhance its security measures and reassures its customers of their safety. The regulator’s decision to lower the reimbursement threshold reflects a pragmatic approach to managing scam compensation. Revolut’s ongoing collaboration with Cifas and its active participation in legislative inquiries demonstrate a committed stance against fraud. However, the effectiveness of these measures in reducing scam incidents and restoring customer trust will be closely monitored.
