A Yorkshire-based foreign exchange provider has turned consumer champion by filing a series of complaints to the Advertising Standards Authority (ASA) over its rivals’ use of online currency converters.
Helen Scott, managing director of Eris FX, says consumers are getting a raw deal when trying to get an accurate foreign exchange rate. Many specialist currency companies provide ‘currency converters’ on their website which consumers mistakenly believe show them the true cost of their currency conversion.
However she says almost all of these currency converters only return the ‘interbank rate’ and not the real customer dealing rate, therefore misleading consumers who do not see or click on a disclaimer about the rate.
“The interbank rate is simply the rate that the banks deal at between themselves. Consumers think that they can get the interbank rate or something close to it when in fact there is absolutely no way of accurately forecasting what rate they will actually get simply from the interbank rate,” says Helen.
“This is a common clever marketing practice to hook the consumer, but in my view, this practice is in breach of consumer protection legislation and therefore unlawful.”
The Department for Business Innovation and Skills (BIS) has published guidelines on pricing practices for currency companies. Helen says: “The guidelines clearly state that a currency company should only ever show an accurate rate that a consumer can actually achieve. Showing an inaccurate rate with a disclaimer is prohibited.”
In addition to the currency converter challenge, Eris FX has also lodged further complaints with the ASA, claiming that:
- Comparison sites are misleading to consumers because they offer ‘indicative’ rates with disclaimers which are of no practical use
- Some currency companies are making unsubstantiated claims about ‘best rates’ and how much their customers have saved compared to using a bank
- Other providers show what they say is a dealing rate which can then worsen by as much as 3 per cent by the time the customer transfers their funds.
In contrast, Eris FX is the only company in the industry to show live ‘streaming’ customer dealing rates on the currency converter on its website which include all the company’s costs and fees with nothing additional to pay.
Helen added: “Consumers mistakenly think the rates on other companies’ sites are better but they are not because they don’t include the currency companies’ costs.
“Once those are added the Eris FX price is very rarely beaten and then only on very small transactions. I’m determined to change the industry for the better and not join in the dubious practices that currently prevail.”
Eris FX has a total nine complaints awaiting a ruling from the ASA.