Digital bank Revolut is under scrutiny from the UK’s Financial Conduct Authority (FCA) for allegedly allowing money to “leave accounts flagged as potentially being used by scammers.”
The Lending Standards Board (LSB) oversees the CRM Code, which is reportedly “the only set of protections requiring firms to tackle authorized push payment scams by detecting them and putting in place measures to stop them.”
In statements shared with CI, Laura Mahoney, Head of Policy at the LSB, comments:
“It is imperative that firms implement robust APP scam prevention measures, as fraudsters become ever-more malicious and innovative. The new Code provisions provide an additional safeguard against criminals, by stopping fraudulent account openings and cracking down on those receiving illicit payments. Victims of scams endure lasting emotional and psychological distress even after receiving their money back, and society at large suffers as criminals continue to profit from their illegal activities. Our ongoing priority is to prevent consumer harm, reinforcing the need to maintain an industry Code that has a clear focus on the prevention and detection of APP fraud.”
In February, the LSB published updates “to the CRM Code, requiring signatory firms receiving scam payments to play a greater role in protecting the customer.”
This included:
- Requiring firms to go further in identifying new and existing accounts at higher risk of being used by criminals.
- Monitoring the payments that they are receiving to help them identify suspicious inbound payments and accounts that might be being used by scammers.
As reported, the UK’s FCA, which monitors Revolut’s payments unit, is currently holding talks with the company, with the added support of the NCA, regarding the supposed failures that took place during July and August of this year. This, according to a report from FT, which cited sources familiar with the issue.
Around £1.7 million had been transacted from the flagged financial accounts, the sources claimed. As reported by the FT, Revolut informed the FCA of the issue during the past few weeks; however, the source(s) says that around £500,000 had actually been transferred.
The most recent UK issue has been revealed as talks are ongoing regarding Revolut’s nearly 2-and-a-half-year-old application for the banking license it requires to support its business growth.
After claiming that the UK license would be issued quite soon, back in March 2023, Revolut noted that it will not comment on license applications for now.
