Revolut, the popular fintech company, is facing a €700,000 ($735,880) lawsuit stemming from an alleged fraud that highlights vulnerabilities in its payment system, Bloomberg reports.
Serbian energy company Terna Energy Trading d.o.o claims it unknowingly transferred the sum to a Revolut account controlled by a 22-year-old Czech fraudster, believing it belonged to a business partner.
Court documents filed in London reveal that Revolut initially froze the payment but subsequently released the funds without warning or intervention. The fraudster rapidly dissipated the money through a series of transactions within hours. Terna’s lawyers criticized Revolut for lacking readily available channels to report suspected fraud, emphasizing that despite operating a large-scale financial services business, the company offered no immediate means of communication for reporting such incidents. Terna is seeking the full amount plus interest.
This case underscores a growing problem for Revolut. The company leads all UK rivals in the number of authorized push payment (APP) scam complaints filed with the Financial Ombudsman Service (FOS). APP scams involve criminals tricking individuals into sending money to accounts they don’t control.
While Revolut “denies all elements of the claim” and argues it received the money in good faith, the lawsuit raises serious questions about the platform’s security measures and its handling of fraud reports.
The situation is further complicated by Revolut’s increasing resistance to reimbursement requests from fraud victims, as evidenced by a surge in FOS complaints last year. This, coupled with a separate incident in 2022 where Revolut lost around $20 million due to a flaw in its US payment processing system, paints a concerning picture regarding the company’s security and its ability to protect its users from increasingly sophisticated scams.
