FCA raises online currency converter concerns
Written by Anthony Strzalek
The Financial Conduct Authority (FCA) has raised concerns about payment and e-money institutions using currency converter tools in relation to their currency transfer services in a “misleading way”.
The FCA has commenced investigations into a number of payment institutions whose promotions it considers to be potentially misleading as a result of their use of the interbank rate in an online currency converter tool and in other promotional material.
The FCA states: “Tools which convert currency at the interbank rate may be used in such a way as to give consumers the misleading impression that the rates shown are available to them, rather than the materially inferior rate that they are likely to achieve.
“Furthermore, consumers may not become fully aware of the inferior rate they are likely to achieve until an advanced stage in the customer journey, commonly after a customer registration process has been undertaken. At that stage, consumers may be unlikely to shop around.”
Since the investigations commenced, the FCA has claimed a number of firms have taken steps to ensure they do not risk misleading customers as to the conversion rate they will achieve if they use the firm’s currency transfer services, however there are still a number of firms offering customers misleading rates.
All firms undertaking currency transfer services must comply with the Consumer Protection from Unfair Trading Regulations 2008 (CPRs).