Help preventing Bank Rip-off When Sending money Overseas ?

StopBankRipOff

Just to be clear, my bank hide away the £9 no-deduction option, and do not highlight it.
Online, where I made the payment, the £9 option is just not present and does not exist - only the £4 option is present.

I was told afterwards that the £9 option is only available via telephone banking and not online banking.

Looking across the my bank's website, the £4 option is highlighted and prominent, and the existence of the £9 option via telephone banking is very difficult to find and is also very unclear - and it is not surprising that I did not find it.

So for all those who say I should have used the £9 option - obviously I would have done, but my bank made it next to impossible to do.

Why is it highlighting the £4 option, when the £4 option is really £4 + $25 ???
How can people say this is neither misleading nor unfair ?!?

StopBankRipOff

There seems to be a lot of ignorance about foreign currency bank transfers from the UK, so let me clarify.

If I wish to transfer $1,000 US dollars from my UK Barclays USD account to your UK Lloyds USD account, then four banks must be involved, banks A, B, C and D.

Bank A - Barclays Bank-UK
Bank B - Barclays Bank-UK's sub-contractor in the USA
Bank C - Lloyds Bank-UK's sub-contractor in the USA
Bank D - Lloyds Bank-UK

This is because by law, any USD payment must go through the currency host country (in this case USA). So Bank A cannot make payment straight to bank D. Only Bank B in the USA can pay USD to Bank C in the USA to effect a USD transfer.

If we were dealing with Indian Rupees, then banks B and C would have to be in India. If Australian Dollars, then in Australia, etc. This is the law of every country with their own currency.

The direct fees that bank A charges its client to make payment will always be known and agreed with its client.
Likewise, if bank D charges its client a fee to receive payment from overseas (many banks do), then this fee will be known and agreed with the client of Bank D.
These charges are part of Bank A & D's standard tariff.

Please note that bank A has only one bank that it deals with in the USA (or in any other country) - Bank B. It does not deal with any other bank in the USA.
Bank B is the sub-contractor of Bank A, and acts for bank A in passing all USD payments to numerous other banks in the USA, depending on the destination of the payment.
Likewise, Bank C is the sub-contractor of Bank D, and acts for bank D in receiving all USD payments from numerous other banks in the USA, depending on the origin of the payment.

The relationship of bank B to bank A is sub-contractor to principle. Bank A pays Bank B to act for it in the USA. Therefore, Bank A knows exactly the charges that Bank B will make for each payment, as it has to agree these with Bank B when it employs Bank B to act on its behalf.
Likewise, the relationship of bank C to bank D is sub-contractor to principle. Bank D pays Bank C to act for it in the USA. Therefore, Bank D knows exactly the charges that Bank C will make for receiving each payment, as it has to agree these with Bank C when Bank D employs it to act on its behalf.

Hopefully, the ignorance that my bank could not know the charges that its sub-contractor in the USA charges is now clearly dispelled.
And hopefully, the ignorance that my bank has to deal with thousands of bank in the USA is also clearly dispelled (it has only to deal with one bank - its own sub-contractor).



Now in the case of my actual payment, there was no Bank C - since the recipient's bank was in the USA, my Bank's USA sub-contractor (Bank could therefore make payment directly to the recipient's bank (Bank D). So there was no bank C.

In my case:
My bank (Bank A) charged me £4 to make the payment of $369. Fine and pre-agreed.
The recipient's bank (Bank D) may well have charged the recipient a small fee (as per their agreed tariff) to receive the payment from overseas. Fine and pre-agreed.
But Bank B had no right to arbitrarily receive $369 from Bank A, and only pass $344 on to the recipient’s Bank D.

My bank (Bank A) knows that its sub-contractor (Bank will charge my bank $25 for passing on my $369 payment on my bank’s behalf to Bank D, and my bank could have, and should have, notified this known amount to me in advance.

Making out that I would be charged only £4, and not the actual £4 + $25 charged, is unfair and misleading.

I hope this dispels much ignorance, and enables those who wish to give advice as to how this unfair and misleading situation might change.

[P.S. My bank is not necessarily Barclays Bank – they were used only for illustration]

Ballard

I know very well how international payments work as I run a department that makes such payments. I didn't, therefore, read all of your post. Your bank have followed the correct procedure in this case.

Had you been sending dollars to the UK then it might actually have been cheaper as the US part of the transfer would have been bank-to-bank and the UK part the customer payment. The recipient bank may have levied a charge to receive or may not but the correspondent banks in the US wouldn't.

Being as the funds stayed within the US then your bank will have had to send a customer payment to their correspondent. This is how it works. There will be charges for this.

In your initial op I am sure that you mentioned that you took the £4 option as that looked cheaper than £9. That is no longer there but your post was edited recently.

There is always an option to take all of the fees at your end but in your case this wasn't taken. Going by my memories of your original post you knew about it but apparently you didn't.

StopBankRipOff

Ballard wrote: »

In your initial op I am sure that you mentioned that you took the £4 option as that looked cheaper than £9. That is no longer there but your post was edited recently.

There is always an option to take all of the fees at your end but in your case this wasn't taken. Going by my memories of your original post you knew about it but apparently you didn't.

Ballard,
It is not unknown for bankers to mistakenly state untruths and nonsense.
You are a self-confessed banker.
And you have just done so.

My original post stands unchanged - except for the [Edit ] parts which were added. I did not take anything away at all in my edit, as it would be unfair and wrong of me to remove any part of my original post.
I only clarified my original post by adding the [Edit] parts to show where there was a mistake.

So your statement that 'I am sure that you mentioned that you took the £4 option as that looked cheaper than £9. That is no longer there' is untrue and misleading - but since you are a banker, I guess that is not surprising.

I repeat - had I know that the £4 was really £4 + $25, and had I known that there was a £9 with no-deductions (I did not), then I obviously would have taken the £9 charge option.
I only discovered this after my complaint to the bank well after the payment.
And the bank's website still makes it seem like the £4 option is only £4 - they and other UK banks are still being clearly misleading in their pricing and unfair to UK consumers (and probably will be until the UK takes the same action that the USA and Eurozone has taken in banning this unfair and misleading practice).

Ballard

I don't see any need to hurl insults, as you have, so I won't contribute any further.

Edit:

This is the part that gave me the idea that you knew about the £9 option in advance. You clearly hadn't taken it out as I'd suggested.

Quote
This is clear as my own bank actually offers a different £9 all-in route for making payment with guaranteed no-deductions. I didn’t use this method as the £4 option looked significantly cheaper.
Unquote

henm2

As you go through the screens for making a payment overseas using HSBC's online banking there is one saying 'important information' which includes the following paragraph.



"Beneficiary banks may charge for receiving international payments. Unless you are sending money in an EEA currency to an EEA country, charges may also be applied by other banks used to send the payment. These charges are not within our control and may be deducted from the payment."


So presumably the OP had seen this and knew there could be charges made by overseas banks.

StopBankRipOff

henm2 wrote: »

These charges are not within our control and may be deducted from the payment."

henm2, That is exactly the point !?!

It is agreed that the charges which are not within my bank's control may be deducted from the payment.
Charges by the recipient's bank and the recipient's bank's agent (Bank D and Bank C) are not within my bank's control, and it is accepted and agreed that they may deduct from the payment.
That is a matter for the recipient, and is not, and cannot be, my concern.

But it CANNOT be true that my bank's sub-contractor's fees are not within the control of my bank.
They ARE fully within the control of my bank, as my bank (Bank A) is the paying principle of their sub-contractor (Bank , and do dictate and agree those charges in advance.

So this clause proves why my bank have been unfair and misleading.

Thrugelmir

StopBankRipOff wrote: »

If I wish to transfer $1,000 US dollars from my UK Barclays USD account to your UK Lloyds USD account, then four banks must be involved, banks A, B, C and D.

Bank A - Barclays Bank-UK
Bank B - Barclays Bank-UK's sub-contractor in the USA
Bank C - Lloyds Bank-UK's sub-contractor in the USA
Bank D - Lloyds Bank-UK

In the UK people normally settle their bills or transfer money in GBP £ not US $. So unsure what your are attempting to illustrate in this example.

StopBankRipOff

Thrulemir,
Have you never heard of an illustrative example ?

I could have used an example of sending payment to a bank in Australia, Turkey, Canada, or anywhere - the example was only for illustration of how foreign currency payments work.

If you would have read the thread, you would know that I actually sent USD to the USA (makes perfect sense) !


How can UK banks be made to stop being unfair and misleading their customers on charges made for payment in foreign currency overseas ?

gt94sss2

StopBankRipOff wrote: »

But it CANNOT be true that my bank's sub-contractor's fees are not within the control of my bank.
They ARE fully within the control of my bank, as my bank (Bank A) is the paying principle of their sub-contractor (Bank , and do dictate and agree those charges in advance.

So this clause proves why my bank have been unfair and misleading.

All the banks do tell you that others may charge for receiving/processing international payments - you have just overlooked this fact and in hindsight appear upset over this - and didn't inquire at the time about the likely charges.

Depending on where you are sending money too.. there is no guarantee that a intermediary bank won't route it via a second intermediary bank before it arrives at its destination - all taking charges among the way.

Regards
Sunil