Hidden Overseas Money Transfer Charges Costing Brits Almost £3bn
04 Oct, 2015, 00:01 BST
LONDON, October 4, 2015 /PRNewswire/ --
TransferWise figures show eight million UK consumers affected
Hidden charges on international money transfers are costing UK consumers £2.88 billion every year, and affecting eight million people.*
The scale of hidden charges on international money transfer is more than twice as much as Card Protection Plan (CPP) mis-selling which cost consumers £1.3 billion, and hit seven million people. The Financial Conduct Authority (FCA) ordered banks and CPP to pay £1.3bn in compensation. Despite the scale of hidden overseas money transfer charges being greater, the Government has yet to take action.
The research comes from TransferWise, the peer-to-peer international money transfer platform. TransferWise is calling for an end to the hidden costs banks and money transfer companies place on pricing in international transfers and travel money. It asks the Government to commit to its pre-election pledge to bring greater transparency to charges and fees applied to foreign exchange transactions.
Taavet Hinrikus, CEO and co-founder, TransferWise said:
"Banking has been unfair for decades. With a monopoly on financial services, high street banks have been able to overcharge and under-serve consumers. To make it worse, there's a complete lack of transparency in the sector. Consumers are often completely unaware of what the banks are charging them.
"That needs to change. This affects millions of people in the UK every year - everyone from students studying abroad to pensioners who have retired overseas. Consumers have the right to know what they're being charged and what exchange rate they're getting - it is their money after all."
The company is launching its Project Payback offer: giving customers back hidden bank charges when they switch to TransferWise.
For October, TransferWise invites anyone who transfers money overseas regularly to tell them how much the bank took in hidden charges last time they made an international bank transfer. When they then make the same payment during the offer period using TransferWise, the company will return the money taken in hidden charges by the bank previously.
The offer period starts 4 October. New UK customers can claim back hidden bank charges from one transaction completed in the three months prior to the date when they transfer again with TransferWise.
Taavet Hinrikus, CEO and co-founder, TransferWise added:
"At TransferWise we believe the lack of transparency in the banking industry is deeply unfair, and we're doing everything we can to make the situation better for consumers. That's why for one month we're committing to giving back customers what the bank took from them in hidden money transfer charges. It was yours - they took it. We'll give it back to you."
Details of how to claim the offer can be found at: http://www.transferwise.com/payback
* Research commissioned for TransferWise. Figures based on 8 million market size (17% of UK adults transfer money internationally, Vision Critical, Jan 2014), and an overseas hidden bank charge benchmark of 4.5%
Notes to editors
TransferWise is the international money transfer platform based on peer-to peer technology. Launched in 2011, it is one of the UK's most successful fintech startups having raised $91m in funding from investors such as Andreessen Horowitz, Sir Richard Branson, Peter Thiel and Max Levchin, the co-founders of PayPal.
Co-founded by Taavet Hinrikus and Kristo Käärmann, the company was created out of frustration with the high fees charged by banks on international money transfer. TransferWise uses the real exchange rate: the mid-market rate - without the hidden mark-up fees - making it up to 10 times cheaper to send money abroad compared to using a bank.
Over £500 million is transferred across the globe every month using the TransferWise platform, saving customers more than £22 million every month. TransferWise is working to make the world a tiny bit better by helping to make the financial system fair.
SOURCE TransferWise