Banks Accused Of Forex Charges Rip-Off

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Expats believe foreign currency transfers cost too much and that many services have rip-off charges.

Only 15% of expats who send money overseas believe the fees they pay for the service are fair.

Around 85% felt £4 was a fair charge – equivalent to an average 2.4% fee, according to a survey by online money transfer firm Azimo.

However, global corporations such as Western Union, MoneyGram and high street banks who have a stranglehold on foreign exchange transfers, currently charge between 8% and 10% of the amount transferred – and sometimes more than 20%.

Despite the fees, just over a third of customers still use the banks as their primary means of sending money around the world.

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Around a fifth make electronic transfers online and 8% use mobile phone apps.

Supporting families

The survey also revealed around 40% of expats would like some facility available to pick up cash rather than have the money go to a bank, around the same number are happy to have the money go to a bank account and 5% would use a smartphone wallet.

The main reason people make money transfers is to support less well-off family and friends in another country.

Around seven out of 10 people spoken to by researchers supported their families.

Other reasons were to aid relatives studying overseas (8%) and gifts to charities (5%).

Michael Kent, the Azimo CEO, said: “The younger generation are more likely to object to fees and to look at smartphone technology to make their money transfers. We expect this trend to continue as technology improves and becomes cheaper.

Cheaper services

“We are concentrating on making money transfers cheaper and quicker for our customers and believe the banks and big companies are ripping them off.”

The Azimo campaign for cheaper foreign exchange costs is supported by former MP Tessa Jowell.

“Millions of people send money abroad every day and they are paying exorbitant fees to people they know have to use their service to support their families.

“The message is people do not have to ripped off and if they shop around, they can find cheaper ways of sending money between countries.”

Azimo is one of several new firms online that charges lower fees than banks and other organisations for sending money overseas.

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