Which? reveals Revolut fraud complaints outstrip all banks

Which? published data from the Financial Ombudsman Service (FOS) in April 2024 showing that fraud complaints about Revolut in 2023 outstripped all banks¹. The consumer body had issued a warning about account takeover fraud on Revolut accounts the previous month¹.

Revolut is an electronic money institution (EMI), not a bank, and holds nine million UK current account customers¹. It was founded in London in July 2015 and applied for a UK banking licence in January 2021; it was granted a full EU banking licence in December 2021, having received a "specialised" banking licence from the Bank of Lithuania in December 2018¹. Which? reported that Revolut "has been left dangling for more than three years" over its UK application¹.

Because it is an EMI, Revolut customers do not benefit from the Financial Services Compensation Scheme, which protects up to £85,000 per institution if a regulated firm goes bust, or from bank transfer fraud protection under the Contingent Reimbursement Model (CRM) Code¹. Which? said it can only recommend providers with both excellent service and appropriate consumer protections, and that Revolut will not be eligible to become a Which? Recommended Provider until it has a UK banking licence and can offer those safety nets¹.

Which? also reported Payment Systems Regulator data on the top 20 receivers of authorised push payment (APP) fraud by absolute value in the UK in 2022, per million pounds of transactions¹:

Which? said the two firms that received the most fraudulent payments in 2022, Clear Junction and BCB Payments, both offer account services to other financial institutions and regulated companies rather than to individual consumers¹. It said PrePay Technologies, Revolut and Wise do provide services to personal customers directly and were all far more exposed than even the worst of the big banks, Metro Bank and TSB¹.

Which? said it first raised concerns about account takeover attacks on Revolut business customers, and that not one of the victims it spoke to was reimbursed despite having their accounts drained in minutes¹. In September 2020 it reported on eight victims who had called the same fake Revolut helpline advertised on Google, four of whom said they were first convinced to transfer money from their main bank accounts to Revolut; Revolut initially refused to refund them, and later reviewed its APP procedures and offered full refunds in all but one of the fraud cases Which? shared¹.

Why it matters for households

Money held with an EMI is safeguarded rather than covered by the FSCS¹. Safeguarding means an EMI must ring-fence customer funds with an authorised credit institution, invest them in low-risk liquid assets held with an authorised custodian, or cover them by an insurance policy or comparable guarantee¹. Which? said that even where money is ring-fenced, there is reason to think of an EMI as a riskier home for money¹. It also noted that where multiple banks share a banking licence, such as Bank of Scotland and Halifax, they are treated as one for FSCS purposes¹.

The FOS data covers complaints made in 2023, and the PSR figures cover fraud received in 2022¹. Anyone who believes they have grounds to complain about a financial firm can read our guides to the Financial Ombudsman Service, taking a complaint to the ombudsman and how much compensation the Financial Ombudsman can award. Our scams and fraud hub covers how fraud happens and what protections apply, including credit card versus debit card protection. Background on Revolut sets out what it offers and what a banking licence means.

What happens next

Revolut's UK banking licence application, submitted in January 2021, remained unresolved at the time of publication¹. Which? said Revolut will not be eligible to become a Which? Recommended Provider until it has a UK banking licence and can offer customers FSCS protection and CRM Code cover¹. No further dates have been reported.