Revolut is a popular digital banking app that has come under fire for its lack of protection for customers. This article highlights the dangers of APP fraud and the lack of protection for customers who fall victim to it. We explore the story of Thomas Crooks, who suffered a traumatic experience with the tech giant.
Small Business Owner’s Traumatic Experience
The family fell victim to a fraudster who used Mr Crooks’s personal details to re-authenticate their Apple Pay through a call that appeared to be from Revolut. Unfortunately, this was enough for the fraudster to download their card onto his phone, leading to a purchase worth £62,000 at Cartier in Selfridges, leaving the family in a state of panic. The couple were unaware that the platform lacks a banking license in the UK. This means that they were not protected against fraud as they would have been with a licensed bank.
They felt further dismay upon discovering that they received no notifications about the transaction, which had bypassed some security protocols through Apple Pay. The scam wiped out their savings, leading to a cutback on their children’s nursery hours. Despite reporting the fraud to the Financial Ombudsman Service, the Crooks have little hope of receiving compensation. Sadly, they are not alone, as the increase in Revolut’s customer numbers has led to a surge in the number of APP scams reported to the ombudsman.
Revolut’s Lack of Obligation to Repay Victims of Fraud
Revolut has come under fire for its lack of protection for customers who fall victim to fraud. Unlike the ten banks that have signed the Contingent Reimbursement Model (CRM), which obligates them to repay victims of APP fraud, Revolut is not bound by the same rules. This implies that Revolut does not have to reimburse its customers if they become victims of fraud.
Fraud experts argue that challenger banks and e-money institutions have not been doing enough to prioritise customer safety. With the increasing prevalence of fraud, banks must take a proactive approach to prevent fraudulent activity and protect their customers.
Obtaining a Refund for Fraudulent Transactions
Obtaining a refund for fraudulent transactions can be a complicated and time-consuming process, leaving victims feeling frustrated and helpless. Banks often require extensive documentation and evidence of fraud before considering a refund, which can significantly impact victims financially and emotionally.
Another challenge is the length of time it takes for banks to investigate and process refund claims. The investigation process can take several weeks or even months. Victims may find themselves without access to their funds or facing financial difficulties during this time. Banks may also require customers to file claims within a specific timeframe, which can be difficult for victims who may not have been aware of the fraud until much later.
The financial impact of fraud can be devastating for individuals and small businesses, wiping out savings and damaging credit scores. Furthermore, the emotional toll of becoming a victim of fraud can be significant, causing stress, anxiety, and a loss of trust in financial institutions.
Proactive Measures to Protect Against Fraud
Preventing fraud should be a top priority for everyone, from individual consumers to businesses and financial institutions. It is important to take proactive measures to protect sensitive information. Things like regularly monitoring accounts for suspicious activity, using strong passwords and multi-factor authentication. Avoiding suspicious emails, texts, or phone calls is also recommended. Financial institutions should also take responsibility for implementing robust fraud prevention measures, such as advanced security systems and real-time transaction monitoring, to protect their customers from potential losses.
Preventing fraud is crucial to protect individuals and businesses from its devastating financial and emotional impacts. Although obtaining a refund after becoming a victim of fraud may not always be possible or easy, taking proactive measures to prevent fraud can help mitigate risks and protect against potential losses. Financial institutions should prioritise customer safety and implement robust fraud prevention measures to protect their customers. Revolut customers should be aware of the platform’s lack of repayment obligation and take necessary precautions to prevent fraud.
