Compensation Claim Success for TLW Client who was Revolut Impersonation Scam Victim

Ms D was the victim of an impersonation scam, a type of Authorised Push Payment (APP) Fraud. In her case, the person sending the text message was pretending to be Ms D’s bank, Revolut. The content of the message was written to shock its recipient and make her act quickly and impulsively, without thinking.

Financial fraud costs the UK hundreds of millions of pounds annually – a recent report put UK losses at £1.26 billion in 2020, with APP fraud making up 38% of the total.

Revolut investigated Ms D’s complaint and tried to get her money back – however, only £20 was left in the receiving bank account. It is not unusual for scammers to move money on to their own accounts, often overseas, as it makes it more difficult to trace or recover.

In response to her complaint, the bank told Ms D that as she had made other large transactions from the account in the previous 12-month period they did not see any reason to look further into the payments with regard to possible fraud. Her complaint was not upheld and Revolut refused to refund her lost money.

Initially, Ms D decided to take the complaint to the Financial Ombudsman Service (FOS) herself for an independent investigation; FOS is the Government backed independent body that settles complaints between financial businesses and their customers. Ms D went through the lengthy and complex application process, something that she had never done before. There then followed extensive communication with the FOS, including providing additional information and follow-ups. Following its investigation, the FOS ultimately found in favour of Revolut and refused Ms D’s compensation request, concluding that the transactions were not ‘unusual’ enough to have suggested fraud.

The FOS investigator said that Ms D’s account was only around a year old, so it was difficult to know what would be considered unusual or out-of-character payments, and other large amounts had already been transferred by Ms D on previous occasions. FOS also noted that Revolut tried to recover the money from the receiving bank once it knew the payments were as a result of fraud.

Unhappy with this decision, and not one to give up a fight easily, Ms D chose to appeal the investigator’s decision, at which time she got in touch with TLW Solicitors and asked for help. The first hurdle was to try and arrange for an extension of time to allow the TLW team to fully prepare and submit an appeal. Ms D spent a considerable amount of time working on getting the extension, in turn, enabling TLW to take on her appeal case.

With the help of TLW lawyer Alex Laws and her colleagues, the appeal claim was submitted, including detailed information and factors that Ms D was not aware that she could include in her initial claim. The FOS investigator considered the whole case again and with the benefit of the additional information, ultimately decided to uphold Ms D’s complaint.

Banks have a responsibility to their customers to ensure that their money is protected. As industry experts, banks should have robust systems in place to monitor large or unusual transactions, to delay payments and ask for more information, or to block payments completely.

Following Alex’s representations, the FOS investigator looked more closely at the processes Revolut had in place to protect its customers and their money. They looked at the law, the City watchdog, the Financial Conduct Authority’s rules and guidance, relevant codes of practice and what was considered good practice within the financial services industry at the time. In particular, they looked at the wording of warnings displayed to customers using online banking, and also what Revolut did or didn’t do after payments were ‘authorised’ by their customer.

In Ms D’s case, FOS concluded that Revolut’s fraud warning was too generic and did not fully explain the impact of impersonation scams or the use by scammers of ‘safe accounts’. FOS found that Revolut should have blocked the payments and contacted Ms D to find out more about why she was making them. The FOS investigator added that banks are the experts in scams, not their customers, and therefore Revolut should have done more in Ms D’s case to protect her money.

While Ms D was initially prepared to handle the FOS complaint on her own, she now urges anyone in a similar situation to consider legal support from the very beginning:

“Without Alex and TLW’s intervention with the appeal I do not think I would have been successful in securing compensation for the scam.

Their knowledge of the financial regulations and important factors that I hadn’t even considered, such as my medical records, were crucial to bolstering the complaint and getting a successful outcome for the claim. The team are also fully familiar with similar cases that the FOS have dealt with, including the decisions that are made far earlier on in the process that are never published on the FOS website.

There is a reason that specialist legal professionals, such as Alex and her team, do what they do and do it so well. They thoroughly understand the ins-and-outs and challenges of these claims and know exactly what to do to get the best results. Thank you!”

Commenting on the FOS U-turn, Alex Laws said:

“There have been a number of similar FOS decisions, where banks have been shown lacking when it comes to their online fraud warnings and fraud prevention processes. Many banking customers, particularly those who are elderly or vulnerable, know far less about scams and financial fraud than the banks do. It is the bank’s responsibility to work hard to protect customers and their money.

The team and I are really pleased for Ms D, who will be refunded the money she lost in what was a sophisticated impersonation scam.”