Revolut fraud complaints to Ombudsman outstrip all banks

Revolut customers who have fallen victim to fraud are turning to the ombudsman in huge numbers to complain, with cases far exceeding those of the UK's largest banks.

If you can't resolve a complaint with a financial services firm, you can take it to the  Financial Ombudsman Service (FOS).

Data provided to Which? by the FOS shows it issued 3,458 fraud and scam-related 'views' (a judgement which can be appealed) to Revolut and its customers in 2023 - the most fraud views issued for any provider.

Barclays had the second-highest number of fraud views issued (3,009) in the same period  - that's significantly fewer despite Barclays being a much larger bank.

The UK's largest banking group, Lloyds, had almost 50% fewer fraud views issued compared with Revolut, at 2,332.

Here we investigate the discrepancy and explain what to do if you've been scammed.

Why does it matter?

Fraud and scam victims typically complain to the FOS when they have requested reimbursement and their provider has declined.

The FOS has the power to compel firms to reimburse their customers if they're judged to have failed to safeguard their customers' funds adequately.

But this can take several months, 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.

• Find out more: How to take a complaint to the Financial Ombudsman Service 

'Carefully investigated'

Technically an e-money provider, Revolut still lacks the UK banking licence it has long sought, 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 large number of fraud and scam complaints are flowing to the FOS from Revolut customers. Its relatively high rate of APP fraud (see below) may be one factor.

Revolut 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.'

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Receiving fraudulent funds

This isn't the first time Revolut's record on fraud has come under the spotlight. 

In 2022, slightly more than £1 in every £1,000 of transactions received by accounts at Revolut were the proceeds of bank transfer scams.

These scams, known as Authorised Push Payment (APP) fraud, involve victims being tricked into voluntarily sending their own money to a fraudster's account.

Revolut's APP fraud rate by value 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 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 how well-prepared providers are for this significant change.

• Find out more: Which? issues Revolut bank account takeover fraud warning 

'We expect them to investigate the complaint thoroughly'

The FOS declined to say whether it was investigating CEL's claim, telling us it couldn't comment on stakeholders' correspondence. But it told us it is in constant dialogue with businesses - including Revolut - about its approach to fraud and scam complaints.

A FOS spokesperson said: 'Being the victim of a fraud or scam can be a life-changing experience – both financially and emotionally – but support is available.

'When a business initially receives a complaint, we expect them to investigate the complaint thoroughly before they respond to their customer.

They added that the FOS was receiving and resolving more than 500 fraud and scam complaints a week and had returned more than £150m.

'In all the cases we receive, we’ll look at the individual circumstances and investigate whether a business did everything required. When we do uphold complaints, we expect firms to learn from our findings and apply them to their future interactions with their customers.

'The Financial Ombudsman Service is free for consumers, and if you think you have been treated unfairly by your bank, you should complain to the business first and then get in contact with our service, and we’ll see if we can help.'