A couple of weeks ago I wrote about problems in transferring £40,000 from the UK to the Czech republic. While still resolving that problem, another one has appeared. So I just thought I'd list them and see if anyone has a reasonable defence for the banks.
To recap on my UK- Czech problem:
HSBC in the UK don't allow you to transfer more than £10k per day. So I had to make three transactions (I stopped before the 4th when I realised what was happening). Each time, HSBC charged me £17.
When the money started to arrive in my Czech bank (the Austrian European big player Raiffeissen), I saw to my horror that they were charging me £40 for each incoming transaction.
With HSBC I rang their call centre. After a half hour of haranguing they agreed to pay refund me £38. With Raifka, I have written to the CEO to complain. He has yet to reply, although my local account manager admitted that a new package of fees was coming in, in response to customer complaints.
Now get this one. The Czech Republic is not yet in the euro, but their banks offer accounts denominated in euros. Or at least nominally in euros. Like many Czech people we plan to spend a happy summer holiday driving to the glorious Croatian coast and staying in private apartments. Owners of such apartments expect 30% deposits when booking, and of course are not set up for credit cards, so you have to pay by bank transfer. The apartment owner we booked with has a euro account as I do (although Croatia is not in the eurozone either). I sent her €150, and Raifka docked me €12 for the privilege (but less than HSBC, you notice). Imagine my surprise when she mailed to thank me for "the €120". I assumed she'd been the victim of a ridiculous incoming charge, but she sent me screenshots which showed her bank charged her less than one euro. Off I went to my local account manager. He was completely at a loss to explain where the €30 had gone. Two days later we have an explanation of some kind. It goes something like this:
"Because neither CZ nor Croatia is in the eurozone we use partner banks as intermediaries for such transactions, but we are unable to tell you in advance about the use of such banks in a transaction.. Nevertheless its your fault because for such a transaction you selected SHA (shared) regarding fees, whereas you should have selected OUR (I pay both my fees and those of the Croatian lady.)"
Breathtaking. Raifka are actually operational in Croatia. Why do they need intermediary banks? The truth is that even though both I and the other person have euro accounts, because they are not eurozone countries, the banks play a game. They pretend it is necessary to convert the euros into Czech crowns, then convert the Czech crowns into Croatian thingys, then back into euros. And to involve some other banks in this process. And charge me for it. What a load of bollocks. If we paid her cash, would we go through all these conversions if I have euros and she wants euros? Of course not. Thats the whole point of the frigging euro.
I have of course written back telling them this is wholly unacceptable. But most Czechs are not stroppy like me. And hundreds and thousands of them take holidays like this in Croatia... think of the Praaaafits!!!
I have recently discovered, thanks to MrOneLung and others, that alternatives exist which can stop the banks thieving like this. Because the latter one really is theft is it not? I successfully used Moneybookers to transfer the final 10k from the UK to CZ for a tiny fee, but it didnt work in Croatia, because the recipient needs to sign up to Moneybookers, and the apartment owners were suspicious of it.
Is there any wonder that ordinary people hate banks?
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I just checked with my bank's web page and as well as free SEPA transfers and free transfers from the UK to other accounts I may have with them in other countries, they also give me up to 8 free SWIFT transfers per month. I said it before, Prague, but you really do need a different banking relationship.
Trouble is I will need to change my Czech bank too.
I do think that here is an example of where the EU tries to help ordinary people - by introducing things like SEPA - and get no credit it for it, nor any support from national politicians who prefer to remain in the pockets of banks. Who here has heard of SEPA.? I hadn't, until it was too late.
When you transfer funds, two SWIFT messages are sent. One to the Croatian Bank to advise who you are crediting and confirming that the beneficiary's bank have had their Euro Account credited. The other goes to the beneficiary bank's correspondent bank and actually credits their Euro account. What your client receives is an internal book entry at their bank.
As others have mentioned, SEPA is meant to make cross-border payments cheaper and easier. If your bank doesn't play ball...move! It's not as difficult as people think it is.
Thanks for attempting to shed light on this. I understand what you are saying, but in response I would say that then these banks outside the euro zone are swindling their customers when they offer 'euro' accounts. Both I and the Croatian lady have accounts which are denominated in euros. But in fact they are bogus accounts, meaningless. You cannot pay euro to euro with these accounts without being swindled.
Tonight the Croatian lady has extracted from her bank and sent to me more information than I suspect the banking industry would want her to have. The intermediary which has taken the 30 euros is Standard Chartered in Frankfurt. Well if Raifka want to involve this non retail bank, thats their business. But why should I pay? I already paid Raifka 12 euros for a transaction which didnt involve the time of any Raifka employee.
Theft. Sorry. I continue to think this word is appropriate.
to transfer between them I first need to transfer the rmb in macau into macao patacas. the maximum for this is around 2000 pounds per day. no fee... but lose money in currency conversion.
then have to do a further currency conversion into hong kong dollars because that is the only way I can send the money to china.next I send the money from macau to china. When the money arrives in china I convert currency 1 further time in to rmb.
soooo.... that is 3 conversions
rmb ~ patacas ~ hk dollars ~ rmb
plus 30~40 quid in fees.
the only alternative would be to get a big briefcase of cash on 1 of my trips between macau and china but that would be illegal... and risky...
rip off!!!
No worries. It is the same with every currency. The "home" currency never leaves the actual home country. If you were sending sterling, for exams, then the transfer of funds would be between the two banks in London (or their intermediary if they did not have a UK office) and the SWIFT message from sending bank to beneficiary bank would advise them that they have credited that bank's sterling account, for the credit of their client. That's when the "book-entry" at the beneficiary bank takes place. They know their account has the funds, they debit their internal account and credit their client.
People do trade in many different currencies and most of the time it should be to provide a natural hedge and avoid what siv has experienced. It helps to avoid unnecessary foreign exchange transactions which can be costly (sometimes not, given timings and market moves).
The "correspondent bank" fee - in this case Standard Chatered - has been set by the Central Bank for many countries. In the UK, I know my bank has a flat £6 fee. Many European countries, including Germany, order that a percentage of the actual transfer is taken! This can be horrendously expensive and a good reason that SEPA is being expanded. What it did tend to do though was reduce other tariffs for bank services. For example, we don't yet have monthly fees for actually having an account (unless you take one of their packages) like the US.
I don't think the offering of accounts themselves are theft. I do think you have a choice over fees though and there are alternatives which are much cheaper and transparent.
Shop around, find an alternative an let your bank know when you do. They are like any other service provider...they may offer you a deal.
It might be worth you looking at www.moneybookers.com for a case like yours and mine where you are sendinG money to yourself in a different country. When I used them, I did in fact escape the outrageous fees that both banks had deducted me. You would have to check if they work in both China and Macau, and then you would have to select which of the two countries is your "home" and be able to prove that to the same extent that you would for opening a normal bank account.
However...one CL regular who is obviously in the know has pointed out to me that the real issue is not the fees but the exchange commission. He estimated that the banks made around £1000 on my transaction on the exchange rate, so we are all focusing on the wrong thing. Well, Moneybookers.com seem to have given me a slightly better exchange rate than my regular banks did, but still made a decent whack.
That my friends is a damn good reason why there is a euro, but you don't tend to hear very much of that from British politicians.
PayPal launched Multiple Currencies to facilitate payments among our diverse base of international members. PayPal is pleased to offer conversion rates that are competitive with those of other consumer services.
The most readily available information on currency exchange rates is based on "interbank exchange rates". Interbank exchange rates are established in the course of currency trading among a global network of over 1,000 banks, and are not available through consumer or retail channels. Consumers may use these rates as a reference, but should not expect to use interbank rates in transactions that involve currency conversion. To obtain actual retail rates, contact your local financial institution or currency exchange, or check the rate displayed in your PayPal transaction.
Displaying Conversion Rates
PayPal will always provide information on transactions that include a currency conversion. The currency conversion rate will be displayed each time you:
•Send a payment in a non-local currency
•Accept and automatically convert a payment to your primary currency
•Withdraw funds in a non-local currency to your local bank account
•Transfer funds between currency balances
In addition, you can go to History to review the currency conversion calculations from previous transactions.
There is no currency conversion for transactions where you:
•Send a payment using a funding source in the same currency
•Receive a payment in a currency for which you hold a balance (you do not need to have funds in the currency balance)
•Withdraw funds in local currency to your local bank account
Robbing bastards.
its the exchange rates where we lose out the most
will look into the alternatives suggested
http://www.moneysavingexpert.com/banking/foreign-currency-exchange
Rob62 - thanks. I did read that article but too late, only after I'd realised how much they were charging. You are right, for the big transaction I should have gone to a broker. A Lifer called MrOneLung works for one of the brokers mentioned, Moneycorp.
- any fee for an incoming payment is absurd. Incoming payments add to the interest a bank can build up and should be encouraged. €40 for an incoming payment is simply obscene
- charges for intermediary banks in such transactions should be abolished, especially when they are hidden from the customer until after the transaction has taken place.
- if a bank offers an account denominated in euros, regardless of whether the account is in the eurozone, then it should be handled as if it was in the eurozone in terms of charges. Otherwise its a scam, and should be illegal. Indeed, I wonder whether in Britain you could bring an action against such scams under the Trade Descriptions Law
- The currency exchange margin needs to be clearly and always flagged up so that we can educate ourselves about the real cost, and compare deals elsewhere
- banks like HSBC need to implement SEPA as the EU intends (ie. not impose artificial low limits on the transaction)
- Limits like HSBC's 10k per day on internet transactions need to be questioned
Thieves?..maybe a bit harsh.. disreputable and dishonest business practices? I rest my case...
I await your comments on all that, Loco..
I don't know about Trade Descriptions but in the UK if you:
1) Found out the name and telephone number of the head honcho contact from the FSA's register of companies;
2) Told your bank you were making a formal complaint to them;
3) Reminded them of it Principles of Business, listed below, from the FSA's handbook (to become the Financial Conduct Authority from 2nd April); and
4) Threatened them with referral to the Financial Ombudsman and the FCA if the matter was not resolved to your satisfaction,
Then they would just roll over, play dead, give you your money back plus some form of ex gratia payment.
In the circumstances you have described, of monies being taken that you were not expecting to be charged to your account then it is clear as day that they have breached Principles 1, 2, 5, and in particular, 6 and 7.
I did this very thing when my bank, on the only occasion they've caused me grief and through no real fault of their own, failed to tell me that they had had a system failure when the payments system switched over to Faster Payments and a credit card bill did not get paid. They took it upon themselves to deal with the card company, got the penalty payments taken off the card statement, paid the bill, and gave me £50 for my trouble.
(There would also be countless Rule breaches that underpin the Principles but probably best not to get to technical here.)
The Principles
1 Integrity: A firm must conduct its business with integrity.
2 Skill, care and diligence: A firm must conduct its business with due skill, care and diligence.
3 Management and control: A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.
4 Financial prudence: A firm must maintain adequate financial resources.
5 Market conduct: A firm must observe proper standards of market conduct.
6 Customers' interests: A firm must pay due regard to the interests of its customers and treat them fairly.
7 Communications with clients: A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading.
8 Conflicts of interest: A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client.
9 Customers relationships of trust: A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgment.
10 Clients' assets: A firm must arrange adequate protection for clients' assets when it is responsible for them.
11 Relations with regulators: A firm must deal with its regulators in an open and cooperative way, and must disclose to the appropriate regulator appropriately anything relating to the firm of which that regulator would reasonably expect notice.
I'd be midly surprised if another EU country didn't have a very similar regime.
Thanks, that's very interesting and useful. With HSBC to be fair to them they did repay me some of their fees. Although I will address the other issues via the route you suggest. Up to now I had not found a way to establish who the head honcho is.
Unfortunately most of my remaining issues now remain with the Czech bank. The trouble is that while the country has been in the EU since 2004, there is generally still an overhang from the Communist era, and the customer is definitely not king. On the other hand there is a bit of an aura around the UK that it is a country which Does Things Properly, so I could throw the Principles at them. That may well carry some weight even if they have not yet embraced exactly these principles.
Service Quality Team (Complaints)
HSBC Bank plc
Arlington Business Centre
Millshaw Park Lane
Leeds
West Yorkshire
LS11 0PP
+44 0800 881 155
servicequality@hsbc.com
www.hsbc.co.uk
The top manager there appears to be called David Webb, (maybe)
The top man as in (controlled function) CF3 CEO is Brian Robertson but he'll be based at Canary Wharf.
Amusingly the person you really want is CF10 Compliance Oversight. That was David Bagley but he resigned on live TV in front of the US senate sub-committee last summer, so somewhat disturbingly, they haven't actually had one since then!
But that's about to be rectified when Ruth Horgan who is going to be Global Head of Compliance takes over but only from 2nd April! And they don't seem to have told the FSA/FCA yet as she's not listed on an individual's search. It might be useful to try that again next week and ask her why she isn't listed with the FCA as a CF10 and ask if not having a CF10 for 8 months is a breach of Prin 3!
You could be her first 'phone call!
HSBC's switchboard at Canary Wharf is +44 020 7991 8888. She used to work for KPMG ha, ha! Try asking for her PA maybe?
I mean, the train was running anyway whether I'd got on it or not.
Disgraceful.
I was thinking the same, I assume PA does all his work for free.
They have a set of fee's, you decide if you want to pay them or not, it's your choice, theft is totally the wrong word. Except HK, Macau and China are basically different countries! (Just don't let any of my students hear my saying that)
I've been sending money back from Thailand for 7 years to a UK account. It was my choice to do it, so I expect to pay the charge. I have now worked out the cheapest solution for sending money back and this meant changing banks. I didn't hold the bank who was charging more responsible, I kicked myself for not looking into the finer details before I'd started.