Revolut is reportedly facing a lawsuit tied into a wave of anti-fraud complaints.
As Bloomberg News reported Monday (Dec. 2), the fraud claim was filed by Serbian firm Terna Energy Trading. The energy company had instructed its bank to send a payment of 700,000 euros ($735,880) to a Revolut account it thought was owned by a business partner.
In reality, the account belonged to a 22-year-old Czech fraudster, the report said, citing court documents. While Revolut’s payment system froze initially, it ultimately cleared the transfer with no warning or intercession, the filing said. The company is seeking a repayment of the 700,000 euros as well as interest.
“Despite operating a sizable regulated financial services business, Revolut provided no immediate means of communication by which it could receive suspected fraud reports,” Terna’s attorneys said in the court filing.
According to Bloomberg, the case is among thousands of complaints filed against U.K.-based Revolut relating to authorized push payment (APP) fraud, scams in which criminals dupe people into sending money online to an account beyond their control.
Data released earlier this year from the UK’s Financial Ombudsman Service shows that Revolut leads all other British FinTechs in terms of the number of fraud complaints.
Revolut “denies all elements of the claim” and in its defense asked a judge to decide that it’s lawful for it to retain the €700,000, arguing that it received the funds in good faith, according to filings from company attorneys.
The case is playing out in the wake of new rules for financial companies in the U.K., requiring them to reimburse victims of APP fraud a maximum compensation of 85,000 pounds.
The new rules came in response to a wave of APP fraud, which cost U.K. residents $433 million in 2023, according to a report published by the country’s Payment Systems Regulator (PSR) in August. That was down 12% from the year before, while the volume of fraud cases increased by the same amount.
The 85,000-pound figure was a last minute addition to the plan, as the PSR initially planned an upper limit for reimbursements at 415,000 pounds.
British FinTech companies — Revolut among them — have argued that tech companies should also play a role in reimbursing APP fraud victims, as many scams originate on social media.
“The wider ecosystem, and key players in that ecosystem, have to be held to account,” David Callington, head of fraud at HSBC UK, said in September.
While banks need to be on alert, the financial obligations need to “sit with those other sectors as well. They need the financial incentive,” he said.
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