It began like any other online transaction. Joshua Hart had a jacket listed for sale on Gumtree when he was contacted by a seemingly interested buyer. The potential customer asked all the right questions – about the jacket’s condition, the size, and the price.

After a brief back-and-forth, the buyer agreed to purchase and set up what Mr Hart believed was a pre-paid Royal Mail collection.

Everything looked genuine. The emails and the website used to confirm the collection mirrored the official channels the buyer had used before. As the process unfolded, Mr Hart was asked to provide his card details – not an unusual request. Many services take small payments to verify accounts.

First, he used his Barclays card, but when nothing happened after his approval, a chatbot emerged and suggested he use a Revolut or Monzo card instead.

But the moment Mr Hart, a regular buyer and seller on online marketplaces who works in IT, approved the transaction through his Revolut app, £300 immediately vanished from his account. Realising he’d been scammed, Mr Hart, 27, from Stowmarket, Suffolk, reported the fraud to Revolut. He said he was met with indifference.

The company refused to investigate, dismissing his claim within minutes because he had authorised the payment in its app. He was left not only out of pocket but also frustrated by the lack of help from the financial tech giant.

After phoning Barclays to find out what happened with the initial transaction attempt, the bank told Mr Hart it had to block “multiple” larger sums that the fraudsters tried to process through his account. Mr Hart said: “I felt sick when I heard that.”

It wasn’t just the £300 that stung. For Mr Hart, the money was significant. He had just purchased his first home and finances were tight.

Revolut, launched in 2015, operates as an electronic money institution (EMI), offering payment services and issuing electronic money entirely online. Unlike traditional banks, EMIs like Revolut cannot lend money, but they have gained popularity for their convenience, providing features such as instant payments and low-fee currency exchange.

As high street banks close more physical branches, many consumers are turning to these platforms for convenience – or necessity. However, relying on digital banking increases the risk of fraud, with fewer in-person options for support.

Fraud in the UK has skyrocketed in recent years, with losses reaching billions annually, making it one of the fastest-growing crimes in the country.

Yesterday research by Citizens Advice suggested one in five people have fallen victim to a financial scam in the last year alone – a staggering nine million victims.

And the latest report from UK Finance shows a significant £459.7million was lost to authorised push payment (APP) fraud in 2023 alone – where victims, like Mr Hart, unknowingly authorise payments to scammers.

Revolut’s unwillingness to investigate or offer any goodwill left him vowing never to use their services again. He said: “When it comes to people’s money, security has to be the number one priority. If it isn’t, trust is lost. I won’t be using Revolut again.”

Unfortunately, Mr Hart’s experience is far from unique. Revolut has faced mounting criticism over its handling of fraud cases. Many customers have been left feeling abandoned by the company when falling prey to scams.

For years, the appeal of digital banking providers has been their ease of use, competitive exchange rates, and sleek, app-based platforms. But as they’ve expanded, cracks have begun to show in their security systems.

While Revolut insisted it “works hard and invests heavily to protect and support customers”, its track record suggests otherwise.

Unlike most traditional banks, the company has consistently refused to refund customers who, like Mr Hart, are scammed after approving a payment. What’s more, a Freedom of Information request from Panorama uncovered that Revolut had been named in nearly 10,000 reports to Action Fraud, the UK’s fraud and cybercrime watchdog, in just a single year.

That’s more than any other UK bank – including big players like Barclays – and double that of Monzo, a competitor of similar size.

While Revolut has grown to more than 45 million customers worldwide, with nine million in the UK alone, the issue has become increasingly concerning.

The company’s lack of actual branches and reliance on digital communication can often make it difficult for customers to get help in urgent situations. In Mr Hart’s case, the initial response from Revolut was through an AI-automated messenger service rather than a person, leaving customers feeling frustrated and helpless in the face of financial loss.

As Mr Hart pointed out, the contrast between Revolut and traditional banks was stark. While Barclays stepped in to block fraudulent transactions before they could take place, app-based Revolut appeared unequipped.

He said: “It’s clear Revolut doesn’t have the same kinds of processes in place as traditional banks. They weren’t helpful at all when I spoke to them.”

This experience echoes the findings of BBC’s Panorama programme last week, which revealed similar patterns of dismissiveness and neglect toward customers reporting fraud. Monday’s episode shed light on more victims, one identified only as Jack, who had a staggering £165,000 stolen from his Revolut Business account.

Former Revolut employees told the BBC the company’s rapid expansion often prioritised growth over security, leaving customers more vulnerable to scams. In Mr Hart’s case, despite being a loyal customer, Revolut was quick to close his case with no investigation and no offer of compensation.

Mr Hart’s story, and others like it, point to a larger issue within the digital banking sector. As these tech-driven banks push to “disrupt” the traditional banking model, they find themselves increasingly at the centre of fraud cases.

According to Panorama, for every £1million paid into Revolut accounts, £756 is linked to authorised push payment (APP) fraud. That’s more than 10 times higher than Barclays and four times more than Monzo. However, the problem isn’t limited to Revolut.

The Payment Systems Regulator (PSR) has highlighted a growing trend in APP fraud across all digital platforms, with fraudsters exploiting the very convenience that attracts customers to these kinds of banks.

By setting up fake accounts or redirecting legitimate payments, criminals can move money quickly and easily, often before the victims realise what has happened.

And when the fraud is reported, many victims find themselves stuck in bureaucratic limbo, struggling to get their money back.

Earlier this year, Revolut was granted a provisional banking licence by UK regulators, putting it on the path to becoming a full-fledged bank. This will allow it to offer more traditional banking services, such as credit cards, overdrafts, and mortgages. However, as financial journalist Frances Coppola pointed out in Panorama, Revolut’s licensing comes at a time when its reputation is already under pressure.

Ms Coppola said: “I suppose you could question, given there are so many complaints, whether Revolut should have a licence?” She added: “No government wants to have a bank that large playing fast and loose with the rules.”

This year, new rules were introduced to make it easier for scam victims to get their money back. Under new PSR regulations, banks and electronic money institutions are now required to refund fraud victims up to £85,000 automatically, with costs split between the sending and receiving firms.

This limit has been slashed from a previous maximum reimbursement value of £415,000. The PSR justified the reduction by stating that very few fraud cases exceed £85,000.

While banks can choose to compensate victims with larger amounts, some argue that this may reduce the incentive for firms like Revolut to enhance their fraud security measures.

Rocio Concha from Which? said: “Some banks and payment firms are not taking fraud seriously enough.”

Instead of offering concessions, Ms Concha said: “The government and regulators need to ensure payment firms and online platforms put in place meaningful measures to protect their customers from fraud.”

As more people turn to digital banks for their convenience, stories like Mr Hart’s serve as a reminder that the ease of technology can sometimes come at a steep price. Trust is the currency of banking, and for Revolut, rebuilding that trust with customers like Mr Hart might be the biggest challenge it faces yet.

A spokesperson from Revolut said: “We are very sorry to hear about Mr Hart’s case, or any instance where our customers are targeted by ruthless and highly sophisticated criminals.

“While we are fully determined to protect our customers as best we can through our fraud prevention technologies, there is no denying that scams like these also need to be tackled at source by online marketplaces, such as Gumtree. Banks and financial institutions should be the last line of defence, not the only line of defence.”