In a move aimed at protecting the interests of foreigners who
send money to their home countries, the UK’s Minister for
International Development, Shahid Malik, has launched a voluntary
customer charter for money transfer companies.
According to the Department for International Development
(DFID), which developed the charter together with a private-sector
remittances task force, a total of £2.3 billion ($4.5 billion) is
remitted to more than 50 developing countries each year by
foreigners in the UK.
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Explaining the rationale for the charter, the DFID said many
foreigners find the remittance process “difficult and insecure”;
their biggest concern is whether money will arrive safely, followed
by excessive charges and delays to relatives receiving the money.
Charges also vary widely and the total cost to send £100 to some
countries can range from less than £4 to as much as £40, added the
department.
Disclosure requirements
Companies that adopt the charter are committed to a number of
requirements that are aimed at ensuring transparency and a
standardised format for remittance transactions. Disclosure
requirements include: total fees to the sender and any fees payable
by the receiver; the exchange rate that applies to the transaction;
how much money will be received; how long the transfer will take;
where and how the receiver can collect it; and actions to take in
the event of something going wrong.
Companies operating 18,000 remittance services outlets, more
than half the total in the UK, have already adopted the charter.
The service providers include Chequepoint, Coinstar Money Transfer,
MoneyGram, Post Office, Ria Envia and many smaller businesses
represented by the UK Money Transmitters’ Association.
Organisations that have adopted the charter will undertake an
annual renewal process to ensure compliance and display the charter
at each of their money transfer premises.
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By GlobalDataService providers that do not comply voluntarily with the
charter’s stipulations are likely to be compelled to do so by the
European Union’s yet-to-be-implemented Payment Services Directive,
which will bring regulation to the money remittance sector. The
UK’s treasury is currently consulting on the implementation of the
directive.
