personal finance

Revolut saga spotlights concerns over digital banks’ service standards

Being repaid the £150,000 in dollars and euros that he had lent to a relative 10 years ago should have been good news for Richard Walker. Instead, it was the beginning of an eight-week nightmare this summer, when he was unable to find out why the money had not arrived in his account. 

As more people sign up to online banks such as Revolut — and complaints about their services grow — the case of Mr Walker (whose name has been changed at his request) raises important questions about the digital future of banking. Can the newcomers to a heavily regulated sector live up to the fintech hype while maintaining the levels of service that customers have come to expect in their day-to-day financial activities?

Left hanging

Mr Walker’s money was transferred to his Revolut account on July 6. The electronic money account marked the amount as “pending”, but then nothing happened to change its status and give him access to the money.

It was the first time that a substantial sum had been paid into his account in the several years he had held it. As a lawyer and now a full-time parent, Mr Walker was aware that banks and electronic banking apps are required by the Proceeds of Crime Act 2002 to monitor accounts for money laundering and fraudulent activity. A large sum being paid in from a foreign account looked suspicious. He decided to contact his bank to explain.

But Revolut did not have a telephone number. Instead it had an “in-app chat” facility that failed to work. A conversation would be started but not finished. A member of the Revolut team left the chat without closing it. Mr Walker found it impossible to make progress on finding his money or receiving a full explanation.

“I must have contacted Revolut more than a hundred times to inquire what was happening and to offer information and documentation using the in-app chat system,” he says. “I provided all I could, such as a thorough explanation, the loan agreements, documents showing where the money was coming from, tax statements, bank statements, but I received no feedback or follow-up on my offer of further documentation.”

The money had been borrowed by his brother to set up an insurance business and the original loan had been rolled over more than once, but information about the interest accrued was available to Revolut on a spreadsheet. Mr Walker says Revolut seemed to be interested only in seeing recent salary slips. He said the bank was surprised when he explained that he had been a full-time parent for several years and could not provide these.

He was aware that, as a Revolut customer, he was not protected by the Financial Services Compensation Scheme, which safeguards customers’ money if banks fail. He wanted to transfer his money as quickly as possible to mainstream banks that would each cover up to £85,000 of the money.

In desperation, on August 20, Mr Walker contacted his local MP, Ben Bradshaw, the Labour member for Exeter. Within hours, Revolut had contacted him to say account was being closed and all the money returned to the accounts that originally sent it. “I had no problem with that and had actually begged them to return the contested £150,000 rather than have it unprotected,” he says.

Missing money

However, it was not so straightforward. Two weeks later, half of the money had not arrived back in his relative’s bank account. Mr Walker claims that Revolut told him the money had been returned automatically on July 7. Then the bank changed its story, saying it had been returned on August 20. Finally, it admitted that it had sent it on August 28, he says.

The return of smaller payments created different problems. He had bought groceries for his neighbours during lockdown and another £200 was payment from the parents of a friend of his daughter to reimburse the cost of a trip that Mr Walker paid for.

When Revolut returned the money to them, one amount of €13.25 had been sent to a closed account, while another of €135 disappeared, said Mr Walker. He then had the embarrassment of having to ask the senders to pay it again into his other account with a high street bank.

In addition to the money from his brother and the small amounts, Mr Walker had about £15,000 in sterling, euros and South African rand, which had cleared months earlier. Revolut said it had converted the £8,000 of sterling and rand into euros, added them to the original euros and paid this money into his euro account.

Only, Mr Walker did not have a euro account. After asking his MP to intervene again, Revolut told him that he needed a euro account to receive the €17,000. The money could not be transferred as sterling and is still in limbo, as Mr Walker has been told he must open a euro account to receive it.

“Revolut finds nothing strange in insisting that a UK citizen, to whom it provided a sterling account in the UK, has to open a euro account to receive cleared, uncontested sterling and rand that Revolut converted without my consent.”

Mr Walker insists that he never complained about Revolut’s regulatory obligations. His grievance was about losing contact with his money for weeks on end. “I used Revolut happily for more than a year and all went well. But one doesn’t want to be with them if something out of the ordinary arises.” 

Rising complaints

Revolut has been the subject of a surge in complaints about the freezing or closing of accounts. Resolver, the online complaints service, reported that it had received 3,911 complaints about Revolut so far this year, compared with 2,487 for the whole of 2019. Of this year’s complaints, 332 were about problems accessing funds, 79 were transfer errors and 176 were multiple complaints involving more than one issue. 

Martyn James, head of media at Resolver, a free online tool for complaints and claims, said: “Of the big three digital banks Revolut is the biggest for complaints. Customer service is a factor in most of these cases, with customers complaining about problems in getting to speak to a person. The complaints about frozen accounts are likely to be the tip of the iceberg as most customers complain about multiple issues.

“Cases where accounts are frozen can be Orwellian, because the bank cannot tell the customer why they have acted. Most cases involve much smaller amounts and can be as little as £200 attracting suspicion.”

The Financial Ombudsman Service said that between July and December last year it received 257 cases about Revolut and upheld 33 per cent of them in favour of the customer. In the first half of 2019, it received 190 Revolut complaints and upheld 50 per cent of them.

Revolut said: “At any given time, a very small number of our 12m customers around the world may have their accounts suspended. This could be due to either a breach of our terms and conditions or as part of our security checks which continuously monitor to keep our customers safe. This measure is a regulatory requirement. 

“We appreciate this can be frustrating for our customers and always work to reopen accounts as quickly as possible, where appropriate. Sometimes, the decision to grant access can be outside our control. All our customers agree to abide by our terms and conditions when they join Revolut and we reserve the right to close the account of any customer that breaches these terms and conditions,” Revolut said.

As an Electronic Money Institution, licensed by the UK Financial Conduct Authority, Revolut said it was legally required to safeguard money received from customers. This meant that, in the event the bank defaulted, “customers would be paid out their account balances from the institution’s safeguarded assets in priority above all other creditors”.

Such assurances may give customers confidence that their money is safe should a digital bank’s future ever be in doubt. When it comes to the day-to-day problems of payments and communication, however, the experience of a growing number of customers suggest the fintech newcomers have more work ahead of them.

Lindsay Cook is the co-author of “Money Fight Club: Saving Money One Punch at a Time”, published by Harriman House. If you have a problem for the Money Mentor to look into, email


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