Survey Reveals True Extent of Confusion for Consumers Using Currency Exchange Firms

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With many British expats keen users of such services, ExpatMoneyChannel surveyed some of the major independent currency exchange providers to assess what protection was in place.

The collapse of Crown Currency Exchange leaving 13,000 clients an estimated £20m out of pocket has put the spotlight on protection for consumers using currency exchange companies.

With many British expats keen users of such services, ExpatMoneyChannel surveyed some of the major independent currency exchange providers to assess what protection was in place. The exercise made for some interesting, yet potentially confusing, results.

The main points of our survey reveal:

  • The difference between currency exchange firms that are FSA registered and FSA authorised is confusing for consumers.
  • The latest regulations which came into force in November 2009 still means that customers of payment service firms will not have access to the Financial Services Compensation Scheme.
  • The fact that only those currency exchange providers offering payment services have to be regulated is confusing to consumers. Bureau de change and firms offering travel money services only are exempt from FSA regulation. Many consumers do not understand the difference between services offered.
  • Pre-paid currency cards issued by major banks and building societies in conjunction with currency exchange firms are considered e-money products and are excluded from the Financial Services Compensation Scheme.

Commenting on the findings, ExpatMoneyChannel’s Deborah Benn said: “While this is only a snapshot of the players involved in this sector, the level of confusion about what protection consumers have is pretty high. In terms of understanding what it all means to them, consumers are being poorly served at the moment as information is neither displayed nor explained clearly enough.”

ExpatMoneyChannel believes all currency exchange firms should offer clear and consistent regulatory advice on their sites so customers are aware of what is and isn't covered, enabling them to make an objective decision on which firm and service to use.

The full article, which includes a table of the survey results as well the key points consumers should be looking at when choosing a currency exchange provider is available at

http://www.expatmoneychannel.com/content/consumer-protection-survey-currency-exchange-firms

NOTES

About ExpatMoneyChannel
ExpatMoneyChannel is a personal finance website dedicated to the 5.5 million British expatriates who currently live overseas, as well as the tens of thousands planning to live abroad. It is a one-stop shop where expatriates can get independent financial information on the wide range of financial options available to them and navigate the latest complex tax, regulatory and investor protection issues.

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Deborah Benn
Expat Media Ltd
+44(0)208 883 4783
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