LONDON (Reuters) – Britain’s markets watchdog proposed new rules on Wednesday to stop banks and other firms from offering misleading currency exchange rates to people sending money abroad electronically.
An English ten Pound note is seen in an illustration taken March 16, 2016. REUTERS/Phil Noble/Illustration –
The Financial Conduct Authority said the market for individuals transferring money abroad from Britain is about 60 billion pounds a year, with remittances or cash sent to relatives and friends in other countries accounting for 18 billion pounds of the total.
“Many different types of customers make use of currency exchange transfer services to move their funds for a variety of reasons such as to send money abroad to family and friends or to purchase an overseas property,” the FCA said in a consultation paper on its proposed rules.
The rules aim to stop banks and other financial firms from promoting unachievable exchange rates to consumers, and stop firms making claims about the cost of a service provided by another firm unless the claims can be proved to be true.
Under the proposed rules, if service providers present comparisons with rival services to consumers they must be fair and balanced and capable of being substantiated.
Some business conduct rules that apply to other parts of retail financial services will also be extended to money sending services, requiring them to treat customers fairly.
“Our proposals seek to address the harm we have seen where firms have issued potentially misleading communications to consumers,” the FCA said.
The proposed rules will not apply to bureaux de change that offer cash-for-cash exchange of currencies.
The public consultation closes in November and the new rules will be published before Jan. 31, 2019.
Reporting by Huw Jones; Editing by Susan Fenton