Revolut Fined €11.5 Million by Italian Competition Authority
Revolut has been hit with an €11.5 million (£10 million) fine by Italy’s competition authority, following a determination that the London-based fintech giant misled customers regarding the fees and terms associated with its investment products.
Concerns Over Misleading Advertising
As reported by City AM, the Italian regulator found that Revolut’s advertisements misleadingly suggested that customers could engage in trading with zero commission. This misrepresentation raised significant concerns about transparency in the company’s customer communications.
Account Management Practices Under Scrutiny
The €75 billion neobank, which recently obtained its banking permit in the UK, was also criticized for imposing unfair restrictions on some user accounts. The competition authority noted that Revolut engaged in aggressive practices when managing account suspensions, limitations, and blocks, often neglecting to provide essential information regarding the relevant terms and procedures.
Inadequate Customer Communication
The regulatory body emphasized that Revolut failed to offer sufficient pre-contractual information to its clients. Furthermore, the company did not notify users in advance when restrictions were placed on their accounts, nor did it provide opportunities for customers to respond or receive adequate support after such actions were taken.
Details of the Fine Structure
The fine encompasses two separate violations. Revolut Securities Europe UAB, the entity responsible for providing investment services within Europe, and Revolut Group Holdings each received a €5 million fine for not delivering clear and comprehensive details about additional costs and commission-free investment features. Additionally, a €1.5 million fine was levied for failing to provide clear information regarding the requirements and timelines associated with migrating customers from Lithuanian bank accounts to Italian accounts.
Plans to Appeal the Decision
Revolut has publicly expressed its disagreement with the ruling and plans to appeal the decision in Italian courts. A spokesperson for the company stated, “This will have no impact on Revolut’s operations or financial position,” indicating the firm’s confidence in its case.
Regulatory Issues Not New for Revolut
This incident is not the first instance of regulatory scrutiny for Revolut. In the previous year, the Bank of Lithuania imposed a £3 million fine for deficiencies in the company’s anti-money laundering controls, citing violations in the oversight of business relationships and transactions. This followed a prior €70,000 (£60,000) penalty in 2022 from Lithuanian regulators for late submission of its financial statements.