Britons petition banks on forex fees | Fin24
 
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Britons petition banks on forex fees

Nov 20 2014 12:39

London - More than 13 000 Britons signed an online petition within hours on Wednesday calling for regulators to force banks to tell consumers how much they make on everyday foreign currency transactions.

The campaign - backed by money transfer company, Transfer Wise - is the latest push for more transparency by companies in London which are trying to eat into margins on transactions the World Bank says average as much as 9%.

This week saw calls for more regulation of wholesale foreign currency markets after six banks were fined a total $4.3bn for alleged manipulation, and added competition for retail and small business transactions would be an extra headache.

While a decade of computerisation has slashed to a few hundredths of a cent the premium that banks charge large companies and financial clients for buying euros or dollars, consumers are still more likely to be charged a few whole cents.

Transfer Wise laid out research from the World Bank and the Charterhouse agency which showed that banks and other traditional providers of currency made £79m ($124m) on embedded fees for consumer transactions in 2012.

Such charges would be slashed if banks were forced to give details of the spread charged between mid-market rate - roughly what a bank pays for the currency - and the rate offered to the consumer, Transfer Wise said.

Banks, still the main destination for people who need foreign currency, say they are providing a competitive service and point to the costs of running secure operations and large retail networks. They say fees fall for larger amounts.

Research by polling body YouGov has shown that 80% of senior decision makers in small UK businesses underestimated or did not know how much banks were charging them for foreign currency, a manifesto accompanying the petition said.

Transfer Wise were targeting 100 000 signatures on popular campaigning website change.org and intend to send it to the UK Treasury's Economic Secretary for Financial Services, Andrea Leadsom.

The company says UK regulators responsible for the financial sector, payment systems and advertising, should insist on more information being provided at point of sale, and is calling for a public awareness campaign from lawmakers and consumer groups.

london  |  foreign exchange  |  banks
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