Nikolay Storonsky’s Revolut freezes accounts in money-laundering bungle
25 Feb 2020

Digital bank Revolut mistakenly froze the accounts of a French company, trapping thousands of euros, in a blunder that has raised questions over its compliance processes as it grows at breakneck speed.

Priorité Energie, which helps low-income families in Paris to insulate their homes under a government initiative, was told by Revolut through an online chat message that it would no longer offer services to the company.

Franck Boubli, boss of Priorité, said that two accounts were frozen for six weeks without explanation, trapping €300,000 (£251,000) and leaving him unable to pay staff.

The error happened after Priorité transferred money to one of its suppliers in the Czech Republic. The supplier was unable to deliver the goods, so it transferred back the money, leading Revolut to freeze the accounts.

After realising it had made an error, Revolut blundered a second time by returning the money to the supplier.

Boubli appointed the law firm Collyer Bristow last month after struggling to get answers from Revolut. He alleges that the bank’s algorithms locked the accounts without humans having “meaningful” oversight of the process.

“This is the worst account-freezing case we have handled because of the dire problems of communication with Revolut, including the bank’s failure to provide any explanation as to the basis on which customer monies were returned to source,” said Craig Deuchrass at Collyer Bristow.

“If Revolut wrongly thought money laundering was involved by the source of the funds or by our client, it seems extraordinary that it should choose to return the funds to the source.”

By Emma Dunkley, The Sunday Times, 23 February 2020

Read more at The Times

Photo: Pete [CC BY 2.0] via Flickr

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