Online fraud is rampant these days. Unlike in the past, now anyone in the world is potentially able to scam you. This puts individuals at risk of losing their money like never before. In today’s case, Larsson v Revolut, Larsson, who was the victim of APP fraud, was convinced to transfer substantial funds (466,617.73 Swiss Francs) from his account in Switzerland to various accounts at e-money institution, Revolut, which he believed had been opened in his name for the purchase of shares in an entity which did not exist.
Revolut was accused of failing to detect and prevent the fraud from those recipient accounts, leading to Larsson’s financial loss. Let’s take a look at the case in question, as well as what you can do to prevent yourself becoming a victim of APP (authorised push payment) fraud.
What did the court decide?
Among other things, the court considered the issues of whether Revolut owed Larsson the contractual or tortious duties. The court rejected the contention that Revolut owed the contractual duty of care to Larsson based on the facts.
The court also rejected the contention that Revolut owed a tortious duty of care to Larsson. No duty of care was owed generally to third party payers such as Larsson. The judge refused to impose a duty simply because Larsson was a customer of Revolut. The judge also held that the possibility of damage being suffered, if Revolut did not take reasonable care in dealing with incoming payments, is no more foreseeable because the payer happens to be a customer of the bank than if it was a third party.
In this case, the court found no duty of care, either contractual or tortious, owed to a third party who is not the customer of the money institution when processing payments.
What protections are there for victims of APP fraud?
Many will be surprised to hear that Revolut does not in fact have a banking licence in the UK, despite applying for one. This means that Revolut customers in the UK are particularly vulnerable to APP fraud. Furthermore, Revolut is also not signed up to the contingent reimbursement model code. This voluntary code that many banks and financial institutions have signed up to sets out how defrauded customers should get their money back.
It is advisable not to keep large sums of money in your Revolut account if you have one due to the difficulty in getting your money back if you fall victim to a scam.
According to Action Fraud, the number of complaints of fraud rose by over 500 in 2024 from 567 in February 2023 to 1,086 in February 2024. APP fraud is a particularly notorious type of fraud which enables fraudsters to make real-time payments from victims to fraudsters.
How can you protect yourself from APP fraud?
Scammers will often impersonate trusted individuals or institutions in order to convince you to transfer the funds, meaning it can sometimes be easy to be swayed into doing what they are asking you to do. Other modes include phishing, invoice scams, romance scams, and investment scams, as happened in the above case.
To protect yourself from APP scams, you should take a number of steps prior to making unexpected requests for money.
Firstly, it is important to verify the identity of the person requesting money or information. Scammers can change their caller ID to match your bank so if you are in any doubt, contact your bank or financial institution directly to verify if they are requesting information from you .
Most banks or financial institutions have a stronger method of verification than they used to in the form of two-factor authentication. This prevents scammers from accessing your account even if they possess your login details.
You should also verify that you are sending money to the right person. Most banking apps feature a verification tick indicating that the bank details match the account name. Furthermore, if in doubt you should double check the details to ensure that you don’t send money to the wrong person.
If you think you have been a victim of APP fraud then you should report it to your bank, the police, and any anti-fraud organisations. They will be able to give you advice and help you to investigate the scam and avoid losing any additional money.
Finally, make sure you do thorough research prior to making any investments, especially if someone approaches you out of the blue regarding an investment opportunity. The vast majority of the time it is likely to be a scam.
Have questions? Get in touch today!
Call us on 020 7928 0276, phone calls are operating as usual and we will be taking calls from 9:30am to 6:00pm.
Email us on info@lisaslaw.co.uk.
Use the Ask Lisa function on our website. Simply enter your details and leave a message, we will get right back to you: https://lisaslaw.co.uk/ask-question/
For more updates, follow us on our social media platforms! You can find them all on our Linktree right here.
