(Bloomberg) -- Revolut Ltd. is facing a UK lawsuit that could see it pay a Serbian energy company €700,000 ($735,880) as part of a fraud claim, calling into question the ease that scammers can operate on the fintech platform.
Terna Energy Trading d.o.o instructed its bank to send the €700,000 to a Revolut account it thought belonged to a business partner, according to documents filed at a London court. Terna alleges that the account belonged to a 22-year-old Czech fraudster.
Revolut’s payment system initially froze but then cleared the transfer of the sum, Terna’s lawyers said.
“As a result of the clearance of the various alerts triggered within the defendant’s systems, the funds were unfrozen and almost all of them were dissipated by the fraudster upon release by the defendant to the fraudster’s Revolut account,” Terna’s lawyers said in court filings.
The allegations, which refer to the incident that happened in 2022, were contained in court documents filed for an administrative court hearing over costs in London on Friday.
“Despite operating a sizable regulated financial services business, Revolut provided no immediate means of communication by which it could receive suspected fraud reports,” Terna’s lawyers said in the documents. Terna is seeking repayment of the €700,000 plus interest.
The case is one of thousands of complaints against London-based Revolut over authorized push payments scams, where criminals trick people into sending money online to an account outside their control. The fintech firm tops all of its UK rivals in terms of the number of fraud complaints, according to data from Britain’s Financial Ombudsman Service.
Revolut “denies all elements of the claim” and in its defense asked a judge to decide that it’s lawful for it to retain the €700,000 on the basis that it received the money in good faith, according to filings from the fintech’s lawyers. A Revolut spokesperson declined to comment further.
Last year, Revolut also began pushing back more on reimbursement requests from thousands of victims, the FOS data shows, prompting a deluge of complaints.
Regardless, the exploitation of hackers has also been costly. The online bank lost some $20 million in 2022 after criminals managed to capitalize on a flaw in their US payment processing system.
(Updates with lawsuit details in the fourth paragraph)
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