Currency exchange service Revolut has been dealing with angry customers locked out of accounts, many of whom have been stranded overseas without funds.
The company, which provides a fee-free currency card for users to spend overseas among other services, has had to deal with a deluge of social media comments from frustrated users at the lack of response to problems.
The firm has recently gone an anti-money laundering drive which has blocked some customers and is asking for documents, such as payslips, passports and P60 forms.
However, many of the customers appear to be innocent victims of the move.
Revolut: The app has seen substantial growth – but it appears many customers are being locked out of accounts
One reader on holiday in Spain told This is Money how he was left unable to pay for his anniversary meal with his wife and has been locked out of his account for almost two weeks.
He said: ‘I took my wife for lunch and I couldn’t even pay. My wife was furious.’
He says he has used the card on numerous trips around the world and been left confused as to why he had been blocked.
He has also sent his photograph with his driving licence, payslips and bank statements and has still not had a solution, with the firm asking for his most recent tax return – a document not many are likely to travel overseas with.
Other customers abroad are also facing similar problems, with some using Revolut as their main payment option abroad and unlikely to be carrying sensitive financial documents.
Online chat: Revolut has locked many customers out of their accounts – some of which are overseas and do not have the documents required by the firm. Picture supplied by our reader
One user – also locked out of their account – has labelled the company’s support as ‘disgusting’ on its Facebook page.
Revolut was founded in 2013 and has seen meteoric growth with customers making use of its fee free currency exchange offer.
It has 2.5million users and expects this figure to rise to 3million by October. As well as offering a pre-paid debit card, it offers currency exchange, cryptocurrency exchange and peer-to-peer payments.
The company has grown at a staggering rate in recent months and compliance experts have been concerned that it may not be able to keep up with its obligations.
According to the company’s own careers page and job site AngelList, it is hiring for a range of roles in customer service and compliance – and this includes a head of compliance.
Other roles are listed such as a French speaking customer service specialist and a compliance analyst based in Krakow.
According to the Sunday Times, the company is on its third head of compliance in 18 months.
Locked out: The Revolut Facebook page contains many customers locked out of accounts
In a telling response to posts about a new product launch, where the company asked users what they think will be announced, one social media user suggested ‘a second support employee joining.’
Some customers have been left frustrated at customer service agents who appear to be university students.
Revolut did not deny that it uses students in its compliance team.
Unhappy: There has been a flood of poor user reviews on the Google Play Store for Revolut in the last month
Further customer frustration comes from the company’s lack of a physical presence.
Unlike traditional banks, Revolut has no bank branches or telephone call centre to make complaints to.
The only way for customers to complain and get problem rectified is through a live chat app – and some are complaining that the wait times can stretch into hours.
A Revolut spokesman told This is Money: ‘Locked accounts only affect a small number of customers, and this is industry standard practice when dealing with potential suspicious activity.
‘We’re really not sure what the story is here, other than Revolut, like thousands of other financial institutions, is doing its job.’
Revolut won’t give a precise number of customers currently locked out.
It also says most customers are responded to within 10 minutes, but it can take longer if there is a sudden spike due to a technical issue.
Blocked: Others have revealed how they have had their accounts blocked
What is behind the lockout?
Industry insiders say problems have arisen from Know your Customer (KYC) checks.
These are carried out by financial firms to confirm their customers are who they say they are.
People may be familiar with the checks when opening up a bank account, with banks asking to see a passport or driving licences as well as proof of home address.
Customers have been able to sign up for Revolut and deposit funds since its origins without any checks.
It told This is Money that customers who haven’t been through the KYC checks are unable to spend the funds, transfer funds, or otherwise use the funds.
In order to use their funds, they must verify their account.
It is believed these controls are now flagging innocent users, which has been denied by Revolut.
Earlier in the year, its founder notified the National Crime Agency and the Financial Conduct Authority that it has discovered suspected money laundering on its system.
Firms only have to report this type of activity to the NCA – but the FCA also expects to be told if the problem is ‘significant’.
Pawel Kuskowsk, former global head of anti-money laundering at RBS, now chief executive of Coinfirm explained the tension between pressure for growth figures and the need to remain compliant.
He told This is Money: ‘This is a common by-product of scaling fast without a proper focus on regulations which at some later point becomes an operationally critical problem.
‘The balance of customer experience and regulations needs to be re-calibrated. This is what’s happening with Revolut – and unfortunately it’s having a huge impact on both its clients and reputation.’
Mr Kuskowsk added: ‘I always say that there is not FinTech without RegTech.
‘Unless companies think about compliance with regulations from the start and build it as part of their technological framework, FinTechs will face the same challenge and problems as larger, traditional players.’