By Samuel Norman

Copyright cityam

Challenger banks Revolut and Monzo have topped the rankings for fraud and scam complaints filed to the Financial Ombudsman Service (FOS) as Brits flock towards digital offerings.

Fintech juggernaut Revolut received the most amount of APP fraud complaints referred to the FOS at 1,875. Monzo scored third at 1,063.

It comes as the pair continue to swell their UK customer bases in their bids to disrupt the banking landscape.

But, even with growing users, both are still dwarfed by Barclays’ 20m retail customers. The banking giant had the second highest APP complaints at 1,161. Monzo has 13m users in the UK and Revolut 12m.

Complaints to Monzo which were referred to the FOS held a 41 per cent uphold rate – meaning the watchdog investigated the case and agreed the customer was entitled to compensation due to the business acting unfairly.

This towered above Barclays’ 31 per cent and beat peer Revolut, which had 30 per cent upheld.

Revolut leaning into AI to fight fraud

The APP figures, revealed by Which?, are almost mirrored across other fraud and scam complaints.

Revolut still tops the rankings at 1,333 but with a higher uphold rate of 37 per cent. Meanwhile, Monzo comes in second with 1,160 and a lower uphold rate of 31 per cent.

On the new figures, Revolut said: “We have robust protections in place for our millions of customers and analyse over a billion transactions a month.

“Our Financial Crime prevention team now makes up more than a third of our total global workforce of 10,000+ employees, and half of the data scientists at Revolut are working on Financial Crime-related topics or products.”

The fintech also said it had developed “sophisticated AI models capable of spotting and blocking potentially fraudulent transactions”.

Monzo said: “Fraud is an industry-wide problem, with people nationwide losing £1.17bn to fraudsters in 2024 alone.

“At Monzo our priority is to stop fraud before it impacts our customers – and it’s working.”

The FOS has rejigged its complaints system over the last year as the Treasury launched a clamp down on the UK’s watchdogs.

Former City minister Emma Reynolds had labelled the body a “quasi-regulator”.

The FOS introduced changes to its administrative fees system in April with it beginning to charge professional representatives £250 for each case referred to the FOS beyond the first ten cases per financial year.

The new system will also not charge banks for the first three complaints they receive in the financial year. From the fourth complaint forward a case fee of £650 is applied, but reduced to £475 if the complaint is dismissed, withdrawn, or abandoned, or if it is found to be outside the FOS’ jurisdiction.

City AM revealed earlier this year the banking industry’s ‘Big Six’ – Barclays, HSBC, Lloyds Banking Group, Natwest, Santander and Nationwide – paid the FOS a combined £38.8m in admin fees for the year ending March 31.