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FCA Investigates 3 Money Transfer Firms for Possible Unfair Competition

by Solomon Oladipupo
  • The regulator believes the firms coordinated in 2017 to purposely overcharge customers.
  • The FCA is awaiting feedback from the firms to decide if the law has been broken.
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The United Kingdom’s Financial Conduct Authority (FCA ) has disclosed that it is investigating three money transfer companies in the country for what might be a violation of the country’s Competition Act of 1998.

The financial markets regulator disclosed on Wednesday that it has issued a statement of objections to the three businesses. A statement of objections is a document that explains why the regulator thinks that a company it is investigating could have contravened the law on business competition in the UK.

According to the FCA, the three money transfer firms being investigated are Dollar East (International Travel & Money Transfer) Limited, Hafiz Bros Travel & Money Transfer Limited and LCC Trans-Sending Limited. Additionally, the investigation includes LCC’s parent company, Small World Financial Services Group Limited, which trades as Small World.

FCA Says Customers Likely Overcharged for Money Transfer to Pakistan

The FCA in a statement explained that it "provisionally" believes that the firms likely overcharged customers between February 18 and May 31, 2017. The regulator also believes that the firms coordinated and charged a fixed exchange rate to convert customers' pounds to Pakistani rupees. In addition, the FCA temporarily holds the view that Small World charged customers flat rate transaction fees to process their money transfer to Pakistan.

Watch the recent FMLS22 session on fostering partnerships between fintech and banks.

However, the market supervisor explained that it temporarily considers the alleged violation to be related to the firms’ provision of “in-store services only," adding that “online services offered by the parties is not considered to have been subject to the alleged anti-competitive conduct.”

Furthermore, the UK regulator pointed out that it will only decide if the Competition Act has been breached after it receives oral or written responses to its investigation from the firms. It added that it would not make further disclosures to the public until a final decision has been reached.

“These are provisional findings and may not necessarily lead to further enforcement action. A statement of objections gives firms notice that the FCA thinks they have infringed competition law and the opportunity to respond by making written and oral representations,” the FCA explained.

Meanwhile, the FCA recently fined Guaranty Trust Bank (UK) Limited £7.67 million for gaps in its anti-money laundering systems and controls between October 2014 and July 2019.

The United Kingdom’s Financial Conduct Authority (FCA ) has disclosed that it is investigating three money transfer companies in the country for what might be a violation of the country’s Competition Act of 1998.

The financial markets regulator disclosed on Wednesday that it has issued a statement of objections to the three businesses. A statement of objections is a document that explains why the regulator thinks that a company it is investigating could have contravened the law on business competition in the UK.

According to the FCA, the three money transfer firms being investigated are Dollar East (International Travel & Money Transfer) Limited, Hafiz Bros Travel & Money Transfer Limited and LCC Trans-Sending Limited. Additionally, the investigation includes LCC’s parent company, Small World Financial Services Group Limited, which trades as Small World.

FCA Says Customers Likely Overcharged for Money Transfer to Pakistan

The FCA in a statement explained that it "provisionally" believes that the firms likely overcharged customers between February 18 and May 31, 2017. The regulator also believes that the firms coordinated and charged a fixed exchange rate to convert customers' pounds to Pakistani rupees. In addition, the FCA temporarily holds the view that Small World charged customers flat rate transaction fees to process their money transfer to Pakistan.

Watch the recent FMLS22 session on fostering partnerships between fintech and banks.

However, the market supervisor explained that it temporarily considers the alleged violation to be related to the firms’ provision of “in-store services only," adding that “online services offered by the parties is not considered to have been subject to the alleged anti-competitive conduct.”

Furthermore, the UK regulator pointed out that it will only decide if the Competition Act has been breached after it receives oral or written responses to its investigation from the firms. It added that it would not make further disclosures to the public until a final decision has been reached.

“These are provisional findings and may not necessarily lead to further enforcement action. A statement of objections gives firms notice that the FCA thinks they have infringed competition law and the opportunity to respond by making written and oral representations,” the FCA explained.

Meanwhile, the FCA recently fined Guaranty Trust Bank (UK) Limited £7.67 million for gaps in its anti-money laundering systems and controls between October 2014 and July 2019.

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