Shadow Cabinet Minister welcomes campaign for more transparency in FX 73% of Brits say government needs to do more to tackle misleading pricing
YouGov, The World Bank, and Charterhouse Research found that:
- Banks and brokers charge as much as 10% for holiday money and 5% for sending money abroad. They misleadingly claim it’s “free”, “0% commission” or only a small fixed fee despite hiding the majority of the cost within an inflated exchange rate (see examples here – www.pinterest.com/transferwise/exposed-the-hidden-cost-of-foreign-exchange) ;
- 86% of Brits and 80% of British SMEs seriously underestimate or are entirely unaware of the full cost of foreign exchange services;
- Unsurprisingly, 91% of Brits believe “free” or “0% commission” should mean a service is totally free;
- Britain lost £1.3bn in exchange rate fees for buying holiday money in 2013.
Today TransferWise launches its manifesto for greater transparency in FX pricing – it has been welcomed by Shadow Cabinet Minister Chi Onwurah. The report calls on banks and brokers to:
- Provide a clear breakdown of the costs associated with every transaction;
- Publish the difference between the exchange rate offered by the provider and the true, mid-market rate;
- Put an end to the use of misleading terms such as ‘free’ and ‘0% commission’ where hidden charges are applied.
TransferWise, in partnership with Change.org, has today launched a petition calling for the end of hidden fees in foreign exchange pricing.
Chi Onwurah, Shadow Cabinet Minister, said:
“Far too often British holidaymakers are duped into thinking they’re not paying currency charges when in fact they are. After the Libor and forex scandals, public confidence in foreign exchange transactions is at an all-time low. So I welcome TransferWise’s campaign for greater transparency. I want UK holidaymakers to get the best deal possible – and know what they’re being charged.”
Taavet Hinrikus, co-founder of TransferWise, said:
“Cracking down on hidden fees is incredibly important to us. My co-founder and I started our business because we were fed up of misleading FX pricing when we first moved to the UK. In fact, hidden fees are so pervasive in the industry, we sometimes struggle to convince potential customers that “free” or “0%” commission” services aren’t free at all. Not only will cleaning up the system be great for consumers, it’ll be great for businesses like ours. Our polling shows that 58% of Brits would consider shopping around for their financial services if they could compare prices more easily.”