Free Currency Transfer – Free Does Not Always Mean Free
Have you ever seen an advertisement that said it contained something for free?
We have all probably bought a dodgy product or service one time or another only to find out later that it wasn’t exactly what we were promised.
In our recent blog article (31,298 Complaints In One Year? (No, Not CurrencyFair!), we shared a quote from the UK Advertising Standards Authority (ASA) after it had received 31,298 complaints about 18,990 ads (none about us, that’s for sure!). 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.
The big danger area for any person or business owner sending money abroad is the claim of ‘zero commission’ or ‘free currency transfer.’
There are many companies which claim to offer ‘free currency transfer’ – banks and post offices are notorious for this. They are, of course, charging you money in other, hidden, ways.
(We’re still not quite sure how they’re allowed to get away with it).
Hiding The Fees Inside A Dodgy Exchange Rate
If you use a bank or post office to send money overseas, chances are you will see that they will claim and advertise in big bold letters that there are no fees, or free money transfers abroad.
Be extremely wary of this scenario.
Banks and post offices are notorious for charging no fee up front to send money and then, lo and behold, to receive money is another scenario all together.
Commissions and other charges are easily disguised and rolled into the actual rate you pay, with you none the wiser.
If you see a company that claims to have no commission attached, chances are that very same company is hiding the fee inside a horribly wide exchange rate to cover the costs of claiming to be ‘commission-free.’
Because it is sometimes difficult to really know what the correct exchange rate of the moment is (and because people don’t realise just how wide the ‘spread’ can be for exchange rates), these companies are easily getting away with this unfair behaviour.
There are other tricks used by dodgy currency exchange providers . . .
Hidden Send and Receive Fees
While you may spot a company that offers a decent exchange rate, together with claims of no commission or any hidden fees, it is important that you be aware of their other hidden fees. These fees usually fall under the category of send fees, receive fees, or percentages that are tacked on after the fact.
In many cases, individuals have sent money abroad only to receive quite a bit less on the other end when all was said and done. By the time fees and exchange rate bumps were added on, the amount they thought they were sending is considerably less than what is received.
By the way, here are CurrencyFair’s fees.
When sending money abroad, it is important to do a compare & contrast of companies and their so-called exchange rates, no fee offers, commissions, percentages, and send and receive fees.
The best way to be a good consumer is to be a knowledgeable consumer.
When you do the work and become knowledgeable about what fees are incorporated when you send money abroad, you’ll start saving significant amounts of money. Don’t be afraid to ask questions. After all, knowledge is power. It’s your money and you work hard for it, so find out your information, and inquire before sending.
These are just a few tips on how to spot when free does not always mean free in the business of sending money abroad.
Want to get started? Check out our transparent currency comparison calculator now.