If you are trying to get the most out of your money, the last thing you need is to be hit by hidden fees after being misled by an advertisement from a trusted brand.
Misleading advertising has become such a problem that, over the last year, the UK Advertising Standards Authority (ASA) received 31,298 complaints about 18,990 ads.
Unfortunately, many businesses and public consumers are being caught out by hidden fees and charges when it comes to making international payments and sending money abroad.
Complaints About Dodgy Pricing
Here’s how the ASA’s recent annual report described the problem of dodgy pricing:
We’ve all experienced it – you respond to an advertised price only to ﬁnd that by the time you make the ﬁnal purchase there are extra costs involved. Whether it’s booking fees, credit card charges or admin costs, they can all add up to an unpleasant surprise. So-called ‘bait-pricing’, ‘drip-pricing’ or ‘partition pricing’ are unclear pricing structures that are of real concern to consumers, honest businesses and us. That’s why it’s one of our top priorities.
The big danger area for any person or business owner sending money abroad is the claim of ‘zero commission’ or ‘fee free’ international money transfers.
You’d be surprised by who is not telling you the whole story.
Trusted Company’s ‘Fee Free’ Claim
Here’s how the UK Post Office uses the term ‘fee free’ on their website:
Our International Payments service is a fee free, easy way to transfer money between UK bank accounts and those abroad. It features a dedicated customer service team, no fees and competitive exchange rates.
‘Fee Free’ Currency Transfer Example
Terms like ‘fee free’ sound great until you actually run the numbers and compare them to more transparent providers.
So let’s run the numbers and, just for fun, let’s use the Post Office’s own numbers from its recent Expat Payments Index research which focused on the cost of foreign exchange transactions in the UK.
The research included tables listing what the Post Office would get the customer in Euros for £500, £5,000, £10,000 and £20,000.
It won’t surprise you to note that the Post Office’s research failed to mention any of the specialist money transfer services so let’s add in CurrencyFair, plus a typical bank, for good measure.
Remember, the Post Office claims on its own website that you’ll be able to send you money abroad ‘fee free.’
So what happened to the Post Office being ‘fee free?’
You expect to lose money at that exchange stand at the airport. You may even expect to be ripped off by a bank. But the Post Office? As brand names go, you don’t get much more trusted than the Post Office. Which makes it all the more disappointing when they deceive you with a hidden commission.
Companies like the Post Office claim to exchange your money ‘fee free’ or with zero commission because they know that most people don’t understand one key point: the company has created a loaded exchange rate to ensure they get a hefty slice of your transfer.
How To Avoid This Problem?
The bottom line is this: do your research and shop around. Sites like Review Centre can help.
Alternatively, you can heed the words of the Chairman of the ASA, Lord Smith:
Making sure that responsible advertising isn’t being under-cut by the irresponsible helps get a fair deal for consumers and competitors. Misleading ads hoodwink consumers, give an unfair advantage to businesses that don’t play by the rules and erode trust in advertising. While the majority of ads stick to the rules, we’re determined to tackle those that don’t.
Just keep your eyes open.
Oh, and try CurrencyFair’s transparent money transfer calculator.