hidden bank charges on fx rate

FCA_ACF

Alderbank said:

DullGreyGuy said:

A link to the specific page would be helpful...

Looking on another page of theirs they state:

The HSBC Global Money Exchange Rate is made up of the cost to HSBC and a foreign currency conversion margin that we include.

So on that page at least there is an acknowledgement of a margin but it doesn't call out what it is. 

The specific page provided in the OP's first post says:

Real time foreign exchange rates
Convert between currencies at competitive exchange rates that are updated every 90 seconds during market hours.

Looking at the instructions page
https://www.hsbc.co.uk/international/global-view-and-global-transfers/

HSBC says you input the amount to transfer online and the screen displays the exact amount you will be charged at their current exchange rate, updating every 90 seconds. If you are happy with that figure you confirm the transfer.

The key here is the word "competitive." A marketing team could choose any adjective with a degree of truthiness. An HSBC call centre agent used the word "healthy" to refer to their margin in a recorded conversation.

Here's a worked example of 'competetive' transferring GBP10k to USD:

HSBC UK	£‎ 10,000.00	US$‎ 12,380.60	1.23806
Wise	£‎ 10,000.00	US$‎ 12,767.65	1.27677
Mid Market	£‎ 10,000.00	US$‎ 12,814.50	1.28145

So, Wise states their charge up front and personal as $37. In fact, when looking up the mid-market rate on the web a few moments later it's more like $46.85. But allowing for fluctuations and variations in the way mid-market is calculated, I think that's absolutely fine. Meanwhile, HSBC says 'no fee', and if you've spent the time to carefully parse their product page and wised-up to the fact that there is a fee buried in the margin, and you've read the word 'competitive', then you might be led to proceed. Of course, caveat emptor. But unless you pull up a spreadsheet, google the mid-market rate at a given moment, then do the sums, you'd be none the wiser that they've just shaken you down for $433.90. Roughly ten times what the competition is charging. So if you can get your head around that being 'competitive', then good luck. To me it's a bare-faced lie over and above the charge that's hidden in the first place.

That doesn't sound to me like they are hiding the cost. I can't see how it could be improved?

Do you happen to work for HSBC?

FCA_ACF

TELLIT01 said:

There is nothing in anything posted by the OP claiming that the exchange rate will be the commercial rate available to business.  The rate is far more likely to the the tourist rate from that bank.  I recently did a transfer to Greece and although there are no charges imposed by the bank, the exchange rate is the tourist rate.

perhaps another way of looking at it is that there is nothing posted by HSBC saying that their rate is the tourist rate + "healthy" markup, as opposed to the rate offered by their competitors.

FCA_ACF

DullGreyGuy said:

Alderbank said:
That doesn't sound to me like they are hiding the cost. I can't see how it could be improved?

Yes and no... as per my own posts they acknowledge its market rate + margin, yes they show you exactly what rate you are going to get but they dont anywhere state what the margin is whereas many other providers explicitly state its X rate plus a set margin... BOS for example say its 2.6% up to £25,000 and 0.8% on £1m 

Exactly. Which brings me back to the question of what legislation exists to keep banks honest? Or am I being naive to think that consumers merit any protection whatsoever? Are we just 'marks'?

FCA_ACF

Ayr_Rage said:

The rate is quoted, WYSIWYG

As above, their fees are not disclosed to you but they advise they make money from it.

Thanks. Maybe I'm overly sensitive but I can't help feeling there's some victim-blaming here.

Question remains, what does the law say about this? What are our consumer rights? Other than the right to be ripped off.

FCA_ACF

Alderbank said:

Looking at the instructions page
https://www.hsbc.co.uk/international/global-view-and-global-transfers/

HSBC says you input the amount to transfer online and the screen displays the exact amount you will be charged at their current exchange rate, updating every 90 seconds. If you are happy with that figure you confirm the transfer.

nowhere, in no sense, does it tell you what you will be charged. the interface simply has a data entry box for the amount you would like to transfer and another box that displays what they will give you. A 5DP fx rate quote appears below all of this with caveat saying that it's only a guide, and that the accurate amount is as shown in the box. If you want to know what you're being charged, then you need to research and calculate. From the interface alone, it is impossible to know what fees are being extracted. It is deliberately opaque. It's not difficult to see how less-than-savvy customers could be taken in by all the disingenuous marketing guff. 'no fee', my ____. No doubt the bank(s) will have their apologists, just like Enron did.

what are our consumer rights?

Ayr_Rage

Consumer rights, as long as they comply with their Ts and Cs which by default you accept when you engage their service then all is in order.

They offer you a rate, you accept, job done, it really is that simple.

As someone who regularly sends funds overseas you have to do your research, WISE are very transparent on their rates and fees are always best for me sending my GBP to where it needs to go.

Their fees may look larger than some, but as they are always convert at very near the mid-market rate I end up better off.

FCA_ACF

Ayr_Rage said:

Consumer rights, as long as they comply with their Ts and Cs which by default you accept when you engage their service then all is in order.

They offer you a rate, you accept, job done, it really is that simple.

'...their service is all in order.' Ok, but in order with what and whom? Or are you suggesting that banks can do as they please, entirely unregulated? Does it follow they could add a clause saying that failure to click on the 'agree to FX rate' button within a given number of milliseconds allows them to quadruple their margin? Or why not simply forfeit the entire amount you were attempting to transfer, the shirt off your back, and your firstborn while they're at it? "...as long as they comply with their Ts and Cs which by default you accept when you engage their service then all is in order." Right?

Am I being sanctimonious in feeling ripped off by the bank's lack of transparency, which is a kind way of putting it? Come to think of it, I don't even have a problem with their banner advertisements shouting 'no fee.' HSBC is a commercial enterprise with a mandate to turn a profit for its shareholders, so of course it's going to cost. Only a fool would swallow the 'no fee' as anything but semantics and sophistry. So be it. But once you're past that, it's not unreasonable to want to know what the cost is without having to hire a forensic accountant or spend an afternoon ploughing through a thicket of misleading web pages that not even HSBC customer service could identify, nor point to in the t&c's! (Incidentally, said customer service agent slammed the phone down on me after 20mins of failing to find the relevant information. I asked for the audio recording under a GDPR SAR, HSBC subsequently admitted fault and tried to bung me £50 to shut up about it).

I'm glad Ayr_Rage and others are so sanguine about this, but clearly they're already savvy operators and good luck to them. But I thought this MSE forum was about Consumer Rights, ie. looking out for those more vulnerable to the sharp and predatory practices of banks like HSBC.

Still hoping I can get advice on what legislation exists, or even which government entity covers banking practices?

FCA_ACF

Ayr_Rage said:

They offer you a rate, you accept, job done, it really is that simple.

I suppose it's a quibble that they're not actually stating what the rate is, so let's park that.

Applying your logic, HSBC could just as easily exact shark rates on a personal loan. Except that there are laws against usury. And even if they did, are you suggesting that a bank could be 'woolly' about the language it uses to describe their loan product? Is there not a law against that?

user1977

FCA_ACF said:

Ayr_Rage said:

They offer you a rate, you accept, job done, it really is that simple.

Applying your logic, HSBC could just as easily exact shark rates on a personal loan. Except that there are laws against usury. And even if they did, are you suggesting that a bank could be 'woolly' about the language it uses to describe their loan product? Is there not a law against that?

There are specific rules about interest rates on loans, so no, that would be completely different.

born_again

FCA_ACF said:

Ayr_Rage said:

Consumer rights, as long as they comply with their Ts and Cs which by default you accept when you engage their service then all is in order.

They offer you a rate, you accept, job done, it really is that simple.

'...their service is all in order.' Ok, but in order with what and whom? Or are you suggesting that banks can do as they please, entirely unregulated? Does it follow they could add a clause saying that failure to click on the 'agree to FX rate' button within a given number of milliseconds allows them to quadruple their margin? Or why not simply forfeit the entire amount you were attempting to transfer, the shirt off your back, and your firstborn while they're at it? "...as long as they comply with their Ts and Cs which by default you accept when you engage their service then all is in order." Right?

Am I being sanctimonious in feeling ripped off by the bank's lack of transparency, which is a kind way of putting it? Come to think of it, I don't even have a problem with their banner advertisements shouting 'no fee.' HSBC is a commercial enterprise with a mandate to turn a profit for its shareholders, so of course it's going to cost. Only a fool would swallow the 'no fee' as anything but semantics and sophistry. So be it. But once you're past that, it's not unreasonable to want to know what the cost is without having to hire a forensic accountant or spend an afternoon ploughing through a thicket of misleading web pages that not even HSBC customer service could identify, nor point to in the t&c's! (Incidentally, said customer service agent slammed the phone down on me after 20mins of failing to find the relevant information. I asked for the audio recording under a GDPR SAR, HSBC subsequently admitted fault and tried to bung me £50 to shut up about it).

I'm glad Ayr_Rage and others are so sanguine about this, but clearly they're already savvy operators and good luck to them. But I thought this MSE forum was about Consumer Rights, ie. looking out for those more vulnerable to the sharp and predatory practices of banks like HSBC.

Still hoping I can get advice on what legislation exists, or even which government entity covers banking practices?

Well 3 letters in your user name cover that? So why are you even asking the question?

They are clear that there is NO FEE by HSBC or they would be stating that you pay £20 FEE or such to make the transfer. If intermediary banks may charge fees, then there is nothing they can do. 
Just the same as you have a fee free oversea's ATM card. The bank who owns the ATM can charge. 

All foreign transfers have a cost (not fee) within the exchange rate used. Just look at a credit or debit card atm/purchase & they are listed.

High street banks will never be the cheapest for these transfers.