By Flora Coleman, Government Relations at TransferWise.
For decades, banks and brokers have used hidden fees to overcharge consumers on international transfers and travel money.
They shouldn’t be allowed to do this.
In 2009 European legislation was passed which mandated that consumers should see the real costs and charges of a foreign currency transaction.
In their own words:
It is essential for payment service users to know the real costs and charges of payment services in order to make their choice. Accordingly, the use of non-transparent pricing methods should not be allowed, since it is commonly accepted that those methods make it extremely difficult for users to establish the real price of the payment service.
But no European country made that a reality.
Instead from 2009 we saw the exchange rate used, and your bank pulled the fee out the transactions. Things like a “non-sterling transaction fee” started appearing in our bank statements.
I paid a premium for my bank account because I thought I would get free international payments. When these charges started appearing in my account I called my bank, the helpful woman at customer support explained to me that they’d always been there. It was just that now the EU had told my bank to tell me about these charges.
Understandably I was shocked, but I thought that I then I finally knew what I was paying for my foreign currency transactions.
Over the years I’ve lost at least £600 making foreign currency payments, and last year the UK as a whole lost more than £5,668,000,00, that’s £112 per adult.
But it gets better, like our customers I now know what I’m being charged to use my own money, because I get the real exchange rate with TransferWise.
And soon everyone could be able to know the real costs and charges of using their own money.
In 2015 the UK Government promised to ban non-transparent pricing in foreign exchange, and the legislation that could do it is about to be scrutinised by our politicians.
In the next few months UK MPs will be deciding on the Payment Services Regulations that set out how we make payments, and what information we as consumers should see.
They must ban this rip off once and for all.
You can find the details of your MP on this website.