Axia FX

Axia FX

September 27, 2011 04:00 ET

OFT Urged to Focus on Currency Exchange for Businesses

Foreign Exchange experts urge the Office of Fair Trading to tackle high exchange rates for businesses who buy currency, as well as consumers.

LONDON, UNITED KINGDOM--(Marketwire - Sept. 27, 2011) - In recent weeks the watchdog Consumer Focus has made an official complaint to the Office of Fair Trading, claiming that we pay excessive costs and charges to buy currency and use our bank cards abroad, but industry experts say this will only scratch the surface of the problems in the currency exchange market.

Cross border business transactions for trade purposes form the largest part of the currency industry. Unnecessarily high rates imposed on businesses by banks to buy currency and transfer money abroad impacts the public every day as these costs are passed on to the consumer through high prices, argues foreign exchange company Axia FX.

The super-complaint by Consumer Focus was issued on 21st September, citing a combination of complex charges and poor or misleading information from banks and bureaus as grounds for investigation. They have called for clearer explanations of exchange rates to show holidaymakers exactly how much they will receive when they buy currency prior to travelling.

Experts at Axia FX believe that this will only scratch the surface of the excessive costs involved in the currency industry. They argue that the real cost to the user and eventually to the consumer is the exchange rate offered by banks when businesses transfer money abroad or buy currency for trade. They say the problem lies in the difference between that rate and where the bank can transact. This "spread", as it is referred to, can range from 0.1% to 5%, resulting in large sums of money being lost to banks. Axia FX estimates that approximately £20m is lost by businesses on a daily basis, with this cost passed on to consumers.

David White, Managing Director at Axia FX says "These businesses are still being charged an inordinate cost by the FX suppliers for overseas business and that cost, without question, is being passed on to the consumer, creating further pressure on inflation and disposable household income. These costs continue to be charged because the operators, the Banks and the Bureau de Changes rely, firstly, on the needs of businesses, and secondly on the lack of understanding of Foreign Exchange rates. So, if the Office of Fair Trading really want to get their teeth into something perhaps they should look at this sector of the Foreign Exchange world."

Companies such as Axia FX are able to offer both businesses and consumers better exchange rates by negotiating with banks and offering a range of transaction options to transfer money abroad. By reducing the money lost to banks when businesses buy currency there is the potential to reduce costs to consumers on a large scale.

About Axia FX

Axia FX are FSA approved experts in foreign currency exchange. They offer outstanding service and the most competitive foreign exchange rates on international transfers and currency purchases for both businesses and private consumers. They offer a range of transaction options to suit differing requirements, and account managers can also help clients develop bespoke strategies to maximise their profits.

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