Sending Money Safely
Sending Money Safely
The Financial Services Authority (FSA), the UK's financial services regulator is responsible for firms based in the UK that send money on behalf of customers.
What this means to consumers
The FSA lay out a set of rules on how firms must treat their customers and protect their money. The FSA is not responsible for other services that these firms may provide, such as foreign exchange.
The following tips will help to make sure that your money is safe and that it will ge to the right place on time and securely.
Check the firm
Every UK-based firm that sends money for customers must be authorised or registered by the FSA as a 'payment institution'. If it uses agents or brokers, the FSA must also be given details of them.
Larger firms must be authorised by the FSA. Small operators can choose to be registered instead of authorised.
So what is the difference?
Authorised
N.B. If the firm uses agents, the FSA also makes a check on them.
Registered
This means that the FSA checks only that:
Safeguarding
An authorised firm must keep your money seperate from the firm's financial income or expenditure. This is to ensure that if a firm gets into a financial difficulty that the customers money will be secure and will be paid back to customer if it is wound up.
A registered firm does not have to do so but can choose to.
What To Check
What if its not on the FSA register?
This could be down to one of two reasons, either:
Is your money safe?
Before you agree to the payment, find out:
After you handed the money over, the firm should give you:
Do not give this information to anybody except the individual or business you are sending the money to. Fraudsters sometimes try to get hold of this information to collect the money before the correct person or business can do so.
What to do if things go wrong
If you have a compliant about the service you have received, you should contact the firm and allow it to resolve the problem.
It must investigate your complaint and reply within eight weeks with a final response, or give reasons why it cannot give a final response. In the meantime it must keep you informed of the progress being made in the investigation.
if you're not satisfied with its responses, you can take your complaint to the UK's Financial Ombudsman Service. The firm should give you details of this free service.
The Financial Ombudsman Service is an independent body, and it will investigate how the firm has dealt with your complaint.
If it decides the firm has acted unfairly and you've lost money, it can order the firm to rectify the position.
The Financial Services Authority (FSA), the UK's financial services regulator is responsible for firms based in the UK that send money on behalf of customers.
What this means to consumers
The FSA lay out a set of rules on how firms must treat their customers and protect their money. The FSA is not responsible for other services that these firms may provide, such as foreign exchange.
The following tips will help to make sure that your money is safe and that it will ge to the right place on time and securely.
Check the firm
Every UK-based firm that sends money for customers must be authorised or registered by the FSA as a 'payment institution'. If it uses agents or brokers, the FSA must also be given details of them.
Larger firms must be authorised by the FSA. Small operators can choose to be registered instead of authorised.
So what is the difference?
Authorised
- The FSA check that the firm:
- is properly organised and is run by suitable people who have not been convicted of financial crimes.
- has enough money behind it, and
- has proper financial security in place to protecr customers' money if it gets into serious financial difficulties. This is referred to as 'safeguarding'.
N.B. If the firm uses agents, the FSA also makes a check on them.
Registered
This means that the FSA checks only that:
- none of the people running the firm have been convicted of financial crimes
- it is based in the United Kingdom and
- if it choosing to safeguard its customers' money and how it does so.
- The FSA makes no check on agents working on behalf of the firm
Safeguarding
An authorised firm must keep your money seperate from the firm's financial income or expenditure. This is to ensure that if a firm gets into a financial difficulty that the customers money will be secure and will be paid back to customer if it is wound up.
A registered firm does not have to do so but can choose to.
What To Check
- Is the firm authorised or registered?
- Go to the FSA.gov.uk website - and search for the firm by business name (or agent), or the registration number, which should be on the paperwork.
What if its not on the FSA register?
This could be down to one of two reasons, either:
- it is operating, illegally, so you should use them, or
- it may be authorised in another EU country. This should be clearly explained in its paperwork or terms and condition. The regulator in that country will have made similar checks to the FSA.
Is your money safe?
- If the firm is authorised, then it is the responsibility of the firm to ensure that your money is safeguarded.
- If the firm is registered, then it can choose whether or not to safeguard your money.
- Information all firms should give you
Before you agree to the payment, find out:
- how much the transaction will cost you
- what exchange rate value is to be used
- how and when the person or business you are sending the money to can receive it, and
- if it is possible to cancel the transaction, how to do so and what charges there will be
After you handed the money over, the firm should give you:
- A receipt of payment, and
- Written confirmation of the cost, the exchange rate and how long the payment will take to get there.
Do not give this information to anybody except the individual or business you are sending the money to. Fraudsters sometimes try to get hold of this information to collect the money before the correct person or business can do so.
What to do if things go wrong
If you have a compliant about the service you have received, you should contact the firm and allow it to resolve the problem.
It must investigate your complaint and reply within eight weeks with a final response, or give reasons why it cannot give a final response. In the meantime it must keep you informed of the progress being made in the investigation.
if you're not satisfied with its responses, you can take your complaint to the UK's Financial Ombudsman Service. The firm should give you details of this free service.
The Financial Ombudsman Service is an independent body, and it will investigate how the firm has dealt with your complaint.
If it decides the firm has acted unfairly and you've lost money, it can order the firm to rectify the position.
- Ask questions at the outset when choosing any financial products.
- Ask if the firm is agent/broker or main provider.
- Ask what happens if things go wrong.