“Scammers stole £300 from my Revolut account – I still haven’t got a penny back” | Personal Finance | finance

It started like any other online transaction. Joshua Hart had a jacket for sale on Gumtree when he was contacted by an apparently interested buyer. The prospect asked all the right questions: about the condition of the jacket, the size and the price.

After a brief back and forth, the buyer agreed to buy and set up what Mr Hart believed was a prepaid Royal Mail collection.

Everything seemed genuine. The emails and website used to confirm the collection reflected the official channels the buyer had previously used. As the process unfolded, Mr Hart was asked to provide his card details, a request which is not unusual. Many services require small payments to verify accounts.

First, she used her Barclays card, but when nothing happened after she was approved, a chatbot popped up and suggested she use a Revolut or Monzo card.

But the moment Mr Hart, a regular online marketplace buyer and seller who works in IT, approved the transaction using his Revolut app, £300 immediately disappeared from his account. Realizing he had been scammed, Mr Hart, 27, from Stowmarket, Suffolk, reported the fraud to Revolut. He said he was met with indifference.

The company refused to investigate and dismissed her claim within minutes because she had authorized the payment in her app. Not only was he left out of pocket, he was also frustrated by the financial technology giant’s lack of help.

After calling Barclays to find out what happened to the initial attempted transaction, Mr Hart was told by the bank that it had to block “multiple” larger sums the fraudsters tried to process through his account. Mr Hart said: “I felt sick when I heard that.”

It wasn’t just the 300 pounds that stung. To Mr. Hart, money was significant. He had just bought his first home and finances were tight.

Launched in 2015, Revolut operates as an Electronic Money Institution (EMI), offering payment services and issuing electronic money entirely online. Unlike traditional banks, EMIs like Revolut cannot lend money, but have gained popularity for their convenience, offering features such as instant payments and low-cost currency exchange.

As high-street banks close more brick-and-mortar branches, many consumers are turning to these platforms out of convenience or necessity. However, relying on digital banking increases the risk of fraud, with fewer options for face-to-face support.

Fraud in the UK has soared in recent years, with losses running into the billions a year, making it one of the fastest growing crimes in the country.

Research by Citizens Advice yesterday suggested that one in five people have fallen victim to a financial scam in the past year alone – a staggering nine million victims.

And UK Finance’s latest report shows that £459.7 million was lost to authorized automatic payment (APP) fraud in 2023 alone, where victims, like Mr Hart, unknowingly authorise- ho payments to scammers.

Revolut’s unwillingness to investigate or offer any goodwill made him vow not to use their services again. He said: “When it comes to people’s money, security has to be the number one priority. If it’s not, you lose trust. I won’t be using Revolut again.”

Unfortunately, Mr. Hart’s experience is not unique. Revolut has faced increasing criticism over its handling of fraud cases. Many customers have been left with the feeling of leaving the company when they fell for a scam.

For years, the appeal of digital banking providers has been their ease of use, competitive exchange rates and sleek app-based platforms. But as they have expanded, cracks have begun to show in their security systems.

While Revolut insisted it “works hard and invests heavily to protect and support customers”, its track record suggests otherwise.

Unlike most traditional banks, the company has consistently refused to refund customers who, like Hart, are defrauded after approving a payment. In addition, a Freedom of Information request by Panorama found that Revolut had been named in almost 10,000 reports to Action Fraud, the UK’s fraud and cybercrime watchdog, in just one year.

That’s more than any other bank in the UK, including big players like Barclays, and twice as much as Monzo, a similarly sized competitor.

While Revolut has grown to more than 45 million customers worldwide, with nine million in the UK alone, the issue has become increasingly concerning.

The company’s lack of physical offices and reliance on digital communication can often make it difficult for customers to get help in urgent situations. In Mr Hart’s case, Revolut’s initial response was through an AI-automated messaging service rather than a person, leaving customers feeling frustrated and helpless in the face of financial loss.

As pointed out by Mr. Hart, the contrast between Revolut and traditional banks was stark. While Barclays stepped in to block fraudulent transactions before they could take place, app-based Revolut appeared unequipped.

He said: “It’s clear that Revolut doesn’t have the same kind of processes as traditional banks. They weren’t helpful at all when I spoke to them.”

This experience echoes the findings of the BBC’s Panorama program last week, which revealed similar patterns of disregard and neglect towards customers reporting fraud. Monday’s episode shed light on more victims, one identified only as Jack, who had £165,000 stolen from his Revolut Business account.

Former Revolut employees told the BBC that the company’s rapid expansion often prioritized growth over security, leaving customers more vulnerable to scams. In Mr Hart’s case, despite being a loyal customer, Revolut quickly closed his case without investigation or offer of compensation.

Mr Hart’s story, and others like it, point to a larger problem within the digital banking industry. As these technology-driven banks push to “disrupt” the traditional banking model, they are increasingly at the center of fraud cases.

According to Panorama, for every £1 million paid into Revolut accounts, £756 is related to authorized automatic payment (APP) fraud. This is more than 10 times higher than Barclays and four times higher than Monzo. However, the problem is not limited to Revolut.

The Payment Systems Regulator (PSR) has highlighted a growing trend in APP fraud across all digital platforms, with fraudsters using the same convenience that attracts customers to these types of banks.

By creating fake accounts or redirecting legitimate payments, criminals can move money quickly and easily, often before victims realize what’s happened.

And when fraud is reported, many victims find themselves stuck in bureaucratic limbo, struggling to get their money back.

Earlier this year, Revolut was granted a provisional banking license by UK regulators, putting it on track to become a full-fledged bank. This will allow you to offer more traditional banking services such as credit cards, overdrafts and mortgages. However, as financial journalist Frances Coppola pointed out in Panorama, Revolut’s license comes at a time when its reputation is already under pressure.

Ms Coppola said: “I suppose you could question, given so many complaints, whether Revolut should have a licence?” He added: “No government wants to have such a big bank playing fast and loose with the rules.”

This year, new rules have been introduced to make it easier for scam victims to get their money back. Under the new PSR regulations, banks and e-money institutions are required to automatically reimburse victims of fraud up to £85,000, with costs split between sending and receiving companies.

This limit has been reduced from a previous maximum repayment value of £415,000. The PSR justified the reduction by stating that very few fraud cases exceed £85,000.

While banks may choose to compensate victims with larger amounts, some argue that this may reduce the incentive for companies like Revolut to improve their fraud security measures.

Rocio Concha from which one? said: “Some banks and payment companies do not take fraud seriously enough.”

Instead of offering concessions, Ms Concha said: “The government and regulators must ensure that payment companies and online platforms put in place meaningful measures to protect their customers from fraud.”

As more people turn to digital banking for their convenience, stories like Mr Hart’s serve as a reminder that the convenience of technology can sometimes come at a high price. Trust is the currency of banking, and for Revolut, rebuilding that trust with customers like Mr Hart could be the biggest challenge it faces yet.

A Revolut spokesperson said: “We are very sorry to hear about Mr Hart’s case, or any case where our customers are targeted by ruthless and highly sophisticated criminals.

“While we are fully committed to protecting our customers as best as possible through our fraud prevention technologies, there is no denying that scams like these also need to be tackled at source by online marketplaces, such as Gumtree. Banks and financial institutions should be the last line of defence, not the only one.”