Three Remittance Firms In Trouble With UK Regulator

January 26, 2023
The UK finance watchdog has issued a statement of objections to three cross-border money transfer firms over alleged fixed prices.

The UK finance watchdog has issued a statement of objections to three cross-border money transfer firms over alleged fixed prices.

The Financial Conduct Authority (FCA) has accused Dollar East, Hafiz Bros Travel & Money Transfer Limited and LCC Trans-Sending Limited, including its parent company Small World Financial Services Group Limited trading as Small World, of fixing prices charged to customers in Glasgow for transferring money from the UK to Pakistan.

The FCA alleges that the three firms coordinated on the exchange rate offered to consumers for converting UK pounds into Pakistani rupees when transferring money to the country.

In addition, the companies fixed the level of a flat rate transaction fee charged to consumers when making money transfers from the UK to Pakistan via Small World’s services.

As a result of this conduct, which took place in 2017, consumers in the Scottish city may have been overcharged for sending money to Pakistan, the FCA says.

The enforcement measure used, a statement of objections, is a document that sets out why and how the regulator thinks that the relevant firms may have infringed applicable competition law.

In particular, it includes the evidence that the FCA is relying on for its accusation, the objections it raises, the action it proposes and its reasons for its proposed action.

Following the issue of a statement of objections, parties have the opportunity to defend themselves on the matters set out in the documents through written or oral representations, which will be considered by the FCA before any final decision is taken.

Therefore, these allegations are provisional findings and may not necessarily lead to further enforcement action.

“The FCA will carefully consider any representations from the firms before deciding whether the law has been broken. The statement of objections will not be made public, however further details will be made public when a final decision is taken,” the FCA said.

If further action is taken, then the companies may suffer harsher consequences.

For example, any business that is found to have infringed the prohibitions dictated by the UK’s Competition Act can be fined up to 10 percent of their annual worldwide group turnover.

The FCA’s use of this tool is relatively rare. It issued its first in 2017 to four asset management companies.

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