FCA to clamp down on misleading currency transfer rates

FCA to clamp down on misleading currency transfer rates

The UK's Financial Conduct Authority is making good on its promise to clamp down on the marketing and promotion of currency transfer services which promise exchange rates that are unachievable.

The move is part of an overhaul of rules and guidance designed to improve conduct in the growing number of non-bank payment services and e-money firms.

The watchdog has released a Consultation Paper which proposes to extend the application of the Principles for Businesses to promotions and communications made by wider categories of businesses authorised or registered under the Payment Services Regulations or the Electronic Money Regulations.

On currency conversion services, the FCA first signaled its intentions in June last year, after finding that many firms have tools on their sites which convert currency at the interbank rate, giving consumers the misleading impression that the rates shown are available to them, rather than the materially inferior rate that they are likely to achieve.

Christopher Woolard, executive director of strategy and competition at the FCA says: “This is a measured intervention - for many it will simply reflect current good practice and ensure that they are subject to the fundamental obligations that we expect of regulated firms.

“For some, however, it should be a clear signal that through our rules, supervisory and enforcement action, we will not tolerate customers being misled or being treated unfairly.”

The FCA is now seeking comments on the proposals set out in the Consultation paper, which closes on the 1 November 2018.

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