Revolut withholds $90,000 from investment manager with “no real response” for months

UK-based fintech, Revolut, is facing fresh allegations of unjustified fund freezes as one private equity investment manager only received his $90,000 bank transfer made in January last week.

As a personal account customer of the fintech for over five years, Mr. Chen trusted Revolut with the funds.

In this exclusive investigative feature, the investment manager, who wishes to be referred to simply as Mr. Chen, tells FinTech Futures about his battle to receive the $90,000, which only became available to him on the eve of 26 March – the original date of publication for this piece. Now, the investment manager struggles to close his account in order to put Revolut behind him as the app crashes with an error message.

FinTech Futures obtained correspondence with Mr. Chen and various Revolut chatbot agents, in addition to the email correspondence received on 23 March from the Financial Ombudsman and Revolut.

Although Mr. Chen has received his money following the added pressure by the Ombudsman, he is one of the lucky ones. Several Revolut clients remain in the dark about receiving their funds as noted on various groups on Reddit, Twitter and Facebook, in addition to reporting by FinTech Futures, the Financial Times, The Telegraph and The Times.

“I’ve never experienced anything like this”

Mr. Chen, a UK-based private equity investment manager with a corporate law background, is no stranger to fintech.

“I’m very familiar with fintechs, challenger banks and the various tech ecosystems in China and the US. But my experience with Revolut is so appalling – I’ve never experienced anything like this,” he tells FinTech Futures.

He signed up with Revolut back in 2015. “I wasn’t a very frequent user. Like many of their users, I used the app to exchange different currencies when I travelled to Europe.”

The $90,000 was “a loan from the company of which I’m one of the major shareholders,” he says. As a personal account customer of the fintech for over five years, Mr. Chen trusted Revolut with the funds.

“The current situation is very embarrassing as I had to explain the situation to other shareholders and find alternative financial resource to repay the company!”

Mr. Chen was in contact with over 21 different chat agents since the saga began.

In January, the $90,000 payment was made from the company’s corporate bank account to his personal Revolut account. “I could have received it through my HSBC account, but Revolut had a more favourable rate.”

 “Every time it’s a different person”

On 19 January 2021, his corporate US-based bank sent Mr. Chen’s funds to its intermediary bank in Europe. The intermediary took 10 days to check the origination of their funds for their standard know your customer (KYC) and due diligence checks. “I even received double confirmation from [my US bank] and [European intermediary] that the funds were released on 2 February, so I was expecting money to show up at any time…but then nothing happened.”

He soon realised there was a problem and tried to contact Revolut. “There was no proper channel. Their phone number is an automated answer machine, which is not helpful, and there was some action through their app chat, so I tried that, provided all the details, but there was no meaningful reply. It was always ‘we will be looking at it’ or ‘our team is on it just be patient’ one time after another.”

Mr. Chen provided FinTech Futures with screenshots of the chat with the Revolut correspondents and can confirm there was no singular case manager or account manager. “Every time it’s a different person – it’s like they will pick up and look at the chat history and update you when they feel like it,” he says. In total, Mr. Chen was in contact with over 21 different chat agents since the saga began.

Correspondence with his US bank, which FinTech Futures also obtained, shows that the transfer was made on 19 January. Mr. Chen shared his concern about the funds’ whereabouts with his corporate US bank on 27 January as the intermediary bank in Europe conducted its checks without any prior notification.

Unjust enrichment

The European intermediary bank cleared its checks on 2 February and notified his US corporate bank about the release of funds on the same day. Still having no response from Revolut about his funds, Mr. Chen began his conversation with Revolut’s customer service chat on 8 February.

The response, received on the 9 February by a Revolut chat agent, reads: “International (Swift) transfers take up to one-to-three working days.”

Since the message noted that it “might depend on the sending bank”, Mr. Chen decided to simultaneously email his corporate US bank about the issue on 10 February, where the US bank’s relationship advisor submits a “trace request to the wire team”.

“The money arrived three weeks ago at this point, and I was asking every day to no real response.”

Following communication with the Revolut chat agent on 10 February that blamed it on “not being a Swift transfer” when it was in fact, executed via Swift, the agent suggested a recall of the funds. Mr. Chen contacted his US corporate bank relationship advisor to action this plan.

However, the recall message did not go from the US bank to Revolut. In fact, the message from the US bank went via their European intermediary bank and on to another bank – Barclays. Although Barclays was “unable to comment on this occasion”, Revolut confirmed to FinTech Futures, that “as an authorised institution, Revolut safeguards client funds as per regulatory requirements. Client funds are stored in a segregated account held with a Tier-1 partner bank (Barclays/Lloyds).”

On 17 February, Mr. Chen’s US bank escalated the issue and requested a cancellation to Barclays via authenticated Swift, to consider the payment null and void and remit funds. “Kindly consider this our initial claim for unjust enrichment,” read the message. As defined by legal research firm LexisNexis, a claim based on unjust enrichment “seeks to restore to an innocent party the gains that someone else has obtained from them. It is part of the equitable remedy of restitution”.

The US bank did not hear back from Barclays or Revolut.

“WHAT!” 

Having thought the funds could potentially be with Barclays, several weeks past with silence until Revolut provided Mr. Chen with a surprising response. “The payment was received on 12th. The relevant team already escalated this to a more specific team to check if we can process this payment and credit your account,” the Revolut agent says.

“I was like, ‘WHAT!’. Even before that, no one confirmed anything! Even on the chat on 1 March they said, ‘no money had arrived – it must be an issue with the sender bank’,” says Mr. Chen.

“The money arrived three weeks ago at this point, and I was asking every day to no real response as they revert back to me on ‘auto mode’. I was asking every day – who is it? Where is the money? When is it processed?”

All chat agents responded with the same message since 2 March, stating, “as much as I wish I could resolve this all for you myself this very moment, I’m afraid we need to wait for any further info from the relevant team of experts who should be able to help here way more”. Mr. Chen took the issue up with the Financial Ombudsman, threatening Revolut with legal action on 12 March. The fintech provided a link to an online form for him to make a complaint, noting that it would take them 15 calendar days to issue a final response.

Revolut’s complaints department sent Mr. Chen an email stating that it “received [his] complaint on the 10 March 2021”, that the transfer, sent on 2 February for a total of $90,000, “did not arrive in [his] account within the estimated timeframe of five working days”, and that “the case was escalated internally to our Payment Investigations team, which is currently conducting a detailed analysis on the matter”.

“There is an option to cancel it, but after several stages, it shows the error message. I bet it’s intentional. They don’t have my trust anymore.”

The email also stated that “[his] funds did reach Revolut’s system, but it appears that due to an error in the format of the transaction data, we simply could not accept the funds and process them into your account”. However, none of the chat agents referred to a payments investigation team, nor did they mention any transaction errors. Revolut tells FinTech Futures that, “this format error also delayed our team from locating the payment initially, and we apologise for the lack of clarity that was provided by some of our customer support team”.

It also claimed that it referred to its banking partner to revert the funds on 18 March 2021.  However, as confirmed by Mr. Chen’s US corporate bank, no such confirmation was received, and no recall messages were answered. “So, as a result, the money was still missing, and Revolut failed to indicate if, and when, my money could be recovered,” says Mr. Chen.

Although Mr. Chen has since received his funds as of 26 March, he is now unable to cancel the account. “There is an option to cancel it, but after several stages, it shows the error message,” he says. “They don’t have my trust anymore.”

 Big red flag

As a lawyer and investment manager with fintechs in his portfolio, Mr. Chen finds that companies treating customers like this would “be a big red flag”.

“It doesn’t matter how fancy your slogans and visuals are. If customers are unhappy because you lack basic services, then your business obviously has a serious problem,” he adds. The Ombudsman tells FinTech Futures that in June-December 2020, “we received 985 new Revolut complaints”.

“We expect all e-money firms to take appropriate steps to ensure customers are treated fairly before, during and after the point of sale of a product,” a FCA spokesperson tells FinTech Futures.

“Even if firms are offering a primarily online or online only service, customers should be able to engage quickly and easily to raise enquires and complaints, and responded to in an appropriate manner and timeframe,” they add.

“On occasion, accounts may be frozen while firms look into possible financial crime concerns with an account such as seeking to make sure an account hasn’t been compromised. However, we expect firms to provide effective and reliable means for customers to contact them regarding any concerns about using their accounts.”

Revolut complaints 

“I was going to take it to the courts – I didn’t see any other option,” says Mr. Chen. FinTech Futures spoke to Florin Hrituliac, a Revolut personal account customer in Romania, who tried to transfer RON 20,000 ($4,832.68) from his company’s bank account to his Revolut account on 9 September 2020, but was unable to access these funds. Hrituliac has since raised a lawsuit in Romania to access his funds and advises others to join the legal action. 

FinTech Futures spoke to one such person considering legal action either by joining Hrituliac’s action or raising a new case in the UK. The customer, who wishes to remain anonymous, was a Romanian premium personal account user whose account – in addition to his son’s account (a UK-based student) – was blocked in September 2020.

FinTech Futures spoke to one such person considering legal action either by joining Hrituliac’s action or raising a new case in the UK.

In September 2020, the Financial Times spoke to a UK Revolut account user, Richard Walker, who had his account suspended after a £150,000 transfer from a friend.

“As a lawyer and now a full-time parent, 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,” notes the FT. “A large sum being paid in from a foreign account looked suspicious. He decided to contact his bank to explain.”

In another case reported by The Times in February 2020, Revolut suspended and subsequently closed a business account containing €300,000 belonging to Priorité Energie, which “helps low-income families in Paris to insulate their homes under a government initiative”, preventing the company from paying its staff.

In January last year, The Daily Telegraph reported that Revolut suspended an account containing £90,000 for more than two months, and that another customer travelled 500 miles from Auvergne in France to Revolut’s London offices in an unsuccessful attempt to recover £15,000 in an account that Revolut had similarly frozen without an articulated justification.

Although Mr. Chen speculated that it may be down to anti-money laundering (AML) system failures, Revolut states that: “Mr. Chen’s Revolut account and funds were not locked or withheld during this period and the delay was not caused by understaffing, backlogs or KYC/AML checks, but by a transaction data format error on the part of one of the intermediary banks or the sending bank. Revolut is not suffering from understaffing (or undue delays in KYC checks). We have sophisticated methods and very high standards of AML protection, although that is not relevant to this case which arose from a technical issue”.

Thankfully Mr. Chen was in receipt of funds on 26 March, and he did not need to file legal action, but with an increase in customer complaints last year and legal cases being pursued elsewhere, lasting concerns remain regarding Revolut’s capacity to cater efficiently to its ever-expanding userbase.

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