Revolut Securities Europe UAB – a group company that provides investment services in Europe – and Revolut Group Holdings Ltd have been fined by the Italian Competition and Consumer Protection Authority (AGCM) for actions that may cause concern to customers. This includes misleading information about investment services and aggressive account management.
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As thepaypers.com website explains, Revolut does not agree with the decision and announces an appeal to court. The case sheds light on the growing regulatory challenges for fintechs in Europe. The decision of the Italian AGCM office shows that financial institutions must increasingly care about transparency and clarity of communication with customers.
Penalties for Revolut concern not only the lack of information about costs and restrictions, but also the way in which accounts are managed and migration of accounts. This is a signal to the entire fintech sector that consumer protection standards are being increasingly rigorously enforced.
Has Revolut misled customers? The case in Italy has been resolved
As the Italian regulator explains in a statement from early April, the highest fines – EUR 5 million each – were imposed for the lack of transparent information about additional costs and limitations of commission-free investment products.
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Another EUR 5 million is a penalty for aggressive actions towards customer accounts, including blocking accounts without clear procedures. An additional EUR 1.5 million concerned unclear rules for migrating accounts from Lithuanian to Italian.
Why did Revolut get a high fine in Italy?
AGCM found that Revolut promoted commission-free investment products without informing that they concerned the so-called fractional shares, which differ from full shares in terms of rights and risks. Customers also did not know that some risk management settings for cryptocurrency investments were limited.
Revolut announces an appeal against the AGCM's decision to an Italian court. The company emphasizes that customer protection is its priority and does not agree with the regulator's allegations.
“Revolut operates based on rigorous Italian banking standards. Monitoring of transactions and accounts is mandatory and necessary to protect customers and the integrity of the financial system. The process of switching to Italian IBAN numbers was carried out in accordance with local banking procedures,” wrote the company's announcement, quoted by thePaypers.com.
Over EUR 11 million in fines for Revolut. The company comments
Revolut explains that the decision of the Italian regulator will not affect Revolut's operational activities or financial condition. “The law requires the company to verify customer documentation and eligibility to ensure a safe, compliant and orderly transfer to a local entity,” Revolut said in a statement.
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The fine was announced just after Revolut obtained a full banking license in the UK and an organizational license in Peru. This is an important moment for the company, which is expanding its operations in new markets, but must take into account the increasing scrutiny of regulators.
