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Digital bank, Revolut, is facing a lawsuit after blocking a customer’s account in Romania.

Florin Hrituliac, a Revolut personal account customer in Romania, 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 tells FinTech Futures that his account was blocked for five days “without any clarifications from their chat agents”. The fintech unblocked the customer’s account on 15 September.

Revolut is facing a lawsuit after blocking a customer’s account in Romania.

Revolut claims that the customer’s account was actually “locked” on 21 May 2020. A spokesperson at the company tells FinTech Futures that the account was rarely used and undergoing a review, hence the account being locked. They explain that the customer was unable to access these funds “due to a mistake on our end where [the] review wasn’t completed on time,” according to the spokesperson. Revolut has since apologised to Hrituliac for the delay.

Hrituliac, a Revolut customer since April 2019, notes that he was unaware of his account’s blocking as “it appeared active and there was no reason provided”. Revolut believes that the customer should have received a notification, as all it requires is a verification on some occasions. “Because of the soft block, it should be immediately flagged until documents are provided or the review is completed,” says the Revolut spokesperson. He adds that the internal review can take either minutes or hours depending on the case. But the firm did not finish the review until they became aware of Hrituliac’s account issues on 10 September.

Although Hrituliac was aware of Revolut making the statement about blocking his account in May to national media outlets, he tells FinTech Futures, that he “was not aware of this at the time of filing the lawsuit”. This was because Hrituliac made payments without any issue in between.

“If Revolut blocked the account since May this means that it was blocked for five months – still no notification received concerning this,” he says. “I had full confidence in transferring the amount of RON 20,000 to my Revolut account; should I have been informed it was blocked, I would sort out the issue first, then transfer the money.”

Hrituliac alleges that this piece of information went unaddressed in chat discussions with the first agent. “She pointed that this transfer was only flagged for further verification, not that the account is/was blocked.”

Initially, Hrituliac believed that his account was blocked for five days, “without any clarification from their chat agents”. Due to Revolut’s lack of response, Hrituliac promptly filed a lawsuit against the fintech in Romanian courts on 11 September, registered in Brasov court under the number 17723/197/2020.

He highlights that the funds appeared as pending/blocked on 10 September at 00:34 am. “I contacted an agent via chat at 8 am and they unblocked the amount on 15 September after several newspapers and websites posted articles regarding court action against Revolut,” he says.

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Hrituliac then sent his query to various national media outlets. This led Revolut Romania to publicly declare that it was making “extra efforts in order to unblock the amount because of the court action”.

“This is unfair to similar customers who were not able to go to court,” says Hrituliac. He finds it “disappointing that they only paid attention to this issue only after public information about court action have been made popular by some websites and newspapers”.

The Financial Times reported on Revolut’s surge in complaints due to its freezing or closing of accounts on 17 September. The report highlights data from Resolver, the online complaints service, that received 3,911 complaints about Revolut so far this year, as compared to its 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.

“Basically, they do not care about our money,” says Hrituliac.

In the FT’s report, UK Revolut account user, Richard Walker, 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.”

“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. Walker found it impossible to make progress on finding his money or receiving a full explanation.”

Hrituliac also faced a comparable situation with chat agents. “After so many attempts to get a piece of information from Revolut agents (documented in the print screens), and no reply from their side, I felt mistreated,” he says. “Upon a search on Google I have realised such bad things happen on a regular basis with Revolut, and affected customers just do not have any means to contact the company, other than the chat window in the Revolut app,” he adds.

“Basically, they do not care about our money. This is when I decided to file a lawsuit against Revolut in my local court.”

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Hrituliac’s account was finally unblocked “without any documents, just based on my explanations,” he adds. “Which again shows many flaws in their anti-money laundering (AML) procedures.”

Revolut claims that the freezing of accounts “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.”

However, Yaron Hazan, vice-president of regulatory affairs at ThetaRay, believes that it may be down to Revolut’s lack of adequate de-risking procedures. “Its ongoing monitoring activities are not in line with the standards of large and commercial banks,” says Hazan. He finds that new digital banks face the conundrum of suspending accounts when met with suspicious activity; however, conventional procedure dictates that they should be going through appropriate AML protocols, flagging these instances to regulators before suspending account activity.

“Only a few cases of regulatory requirements specifically state anything about freezing accounts, freezing money and not providing services, and those are mainly about sanctions,” says Hazan. Otherwise, it is down to the bank to simply manage the risk.

The fintech’s new money laundering officer will have to tackle this case and more.

Michael Cumming-Bruce, senior associate at law firm, Cooke Young, Keidan, thinks the problems come from the firm’s rapid expansion. “Unfortunately, adolescent growing pains are often a part of life for companies, as for people, and it may be that Revolut are now learning the hard way why established banks spend so much time and money on ensuring regulatory compliance in the course of carrying out their business activities.” Hrituliac points to Revolut’s recent job posting for a money laundering reposting officer in Bucharest.

Cummings-Bruce believes the future still seems bright for Revolut, “who despite these awkward customer-facing issues and the pandemic have managed to grow their customer base to over 12 million individuals (which may also help explain these recent difficulties)”.

The fintech’s new money laundering officer will have to tackle this case and more, as Hrituliac’s situation has garnered a lot of interest since his post about it in a Revolut Romania group on Facebook. “Immediately, I have been contacted by messenger by other customers interested in filing a class lawsuit against Revolut in Romania – I redirected them to my lawyer.”

See also: Revolut’s losses treble to £104.7m after year of rapid growth