Intermediary bank transfer fees - unregulated?

[juggsy]

I have some dollars in my Revolut account from selling some stock. I subsequently found out that I can transfer those dollars into my Trading 212 $ cash account and earn interest, without having to convert to £ and being charged the Revolut currency conversion fees (goes over my free allowance).

However, it seems whilst Revolut charge a nominal fee for a SWIFT transfer, and Trading 212 charge nothing to receive, I could be subject to unknown intermediary bank fees during the transfer and end up with less after the transfer arrives.

First off, how is it allowed that fees may or may not be charged, and for a completely unknown amount? Neither bank can provide any information as the intermediary step is a SWIFT / International banking system issue. It seems incredibly unregulated, murky and unfair.

Second, has anyone done such a transfer, did you get charged and how much?I’m

[FiF]

Yes I suffered such a charge. I think it's the same issue. Someone in Sweden owed me some money for a purchase in UK GBP that I had done as a favour, not a massive amount, I was quite happy to wait and accept cash in SEK next time over there. However they decided to pay through their bank. Payment made to a Swedish bank and all fees paid. The amount arrived in the destination account was less than the agreed sum, no charges at my bank.

When asked to investigate my bank stated that was the amount they had received from a british bank X. In answer to the question why they were involved it appeared that they were the designated bank for transfers from Sweden.

Bank X refused to talk to me as I wasn't a customer, refused to declare what their charges were, refused to accept a complaint.

Called Ombudsman office to ask for advice, response was, are you a customer of X, no, is the charge correct, don't know, final answer they could be of no help.

As said it wasn't a big sum, overall the sum owed was about 100GBP ish, of which 20% disappeared in the charge. Lesson learnt both ends and in future any such transaction just got paid cash in sek.

[juggsy]

FiF said:

As said it wasn't a big sum, overall the sum owed was about 100GBP ish, of which 20% disappeared in the charge. Lesson learnt both ends and in future any such transaction just got paid cash in sek.

It’s crazy that it’s just a black box with zero transparency, 20% is a huge potential sum if you’re transferring large amounts. Given there’s no one to challenge if it’s overly excessive is just mad. Problem for me is I can’t do it as cash as we’re dealing with neo-banks in foreign currencies.

[Simpo Two]

juggsy said:

It s crazy that it s just a black box with zero transparency, 20% is a huge potential sum if you re transferring large amounts. Given there s no one to challenge if it s overly excessive is just mad. Problem for me is I can t do it as cash as we re dealing with neo-banks in foreign currencies.

Or it may have been £20 per transaction. Guess we'll never know... unless there are any customers of Bank X here (you may as well name them).

[chip*]

Could be your friend sel|ected the option for all charges to be deducted (including the UK clearing bank) from the proceeds instead of paying the charges upfront?

[FiF]

chip* said:

Could be your friend sel|ected the option for all charges to be deducted (including the UK clearing bank) from the proceeds instead of paying the charges upfront?

No, apparently they asked to pay all charges, including exchange costs so that my account ended up with the desired GBP amount. They definitely paid charges upfront.

Neither of us knew that the transfer would go through an undeclared intermediary bank, who then just removed an amount as a transaction fee that nobody involved knew about, had agreed to, and then wouldn't discuss it or even provide their standard list of fees.

Personally I think it was down to use of a system that was not appropriate for the relatively small sum involved which is why it seemed such an excessive fee in % terms for doing pretty much nothing other than an automatic transfer.

I agree with the OP, this should be capable of being known upfront and not hiding behind you're not our customer.

[FiF]

Simpo Two said:

Or it may have been £20 per transaction. Guess we'll never know... unless there are any customers of Bank X here (you may as well name them).

Not going to name, have previously once been put on the naughty step for a week due to name and shame offence.

[juggsy]

chip* said:

Could be your friend sel|ected the option for all charges to be deducted (including the UK clearing bank) from the proceeds instead of paying the charges upfront?

I have that option as well, either pay Revolut’s fee of $4, or a larger charge which allegedly makes sure you’re covered for everything. Problem is, there’s still a risk of being charged some unknown amount again in between, at which point there’s nothing you can do about it.

[cml24]

I've had this issue when I lived abroad. I was trying to pay off a very small credit card bill in America, from Georgia (the country). Had to be routed through Deutsche Bank, then cleared by another bank in the US. Then when I realised this process, i had to make another payment to cover the remaining balance and all the fees!

I guess, if you make regular overseas transactions, its best to hold accounts designed for that. Eg, if you both held an account with Euros, you could quickly and cheaply transfer between I expect. One off occasions maybe useful to look outside traditional banks?

[JoshSm]

cml24 said:

One off occasions maybe useful to look outside traditional banks?

A big chunk of the problem here sounds like it's from going outside 'traditional' banks and using ones that have to rely on intermediaries to handle certain services.

Not all 'banks' are equal however actively some of them might sell themselves as such.

[Panamax]

JoshSm said:

A big chunk of the problem here sounds like it's from going outside 'traditional' banks and using ones that have to rely on intermediaries to handle certain services. Not all 'banks' are equal however actively some of them might sell themselves as such.

^^ This. I have investigated quite carefully and there are various warnings around the likes of Revolut, Wise etc. They seem to have a decent enough reputation for day-to-day activities online but I'd be reluctant to put substantial £$ with them. For instance, there's no FSCS protection up to £120,000

[gotoPzero]

Had this exact problem sending USD to China from UK account for a holiday.
About £1000. Fees were "clear" at the time we set up the transfer - £10 IIRC.
So £1000 going to USD into China bank.
However the end bank didnt get the full sum. Each leg of the transfer took a %.
So in the end they were short about 10%.
We complained that the fees were not clear and eventually Halifax refunded us the missing sum.
It really would be simple to show the break down before you send the money but no. It seemed to me there was no way to ensure any specific sum would arrive as at each stage the fees might be different. Even on different days. They had no explanation as to how we could ensure that payments would arrive whole. Seems crazy to me.

I have to go through the whole thing again soon and I think the only solution is going to be to use paypal and eat the fees.

[Panamax]

Ouch, 10% is quite a hit so I just checked Paypal and it looks as though their charges stack up in that sort of direction too.

I'd probably open a Wise account to deal with it.

[wibble cb]

Swift has a field for charges- field 70 the options were BEN, the ultimate beneficiary pays all charges, ergo receiver gets less, OUR- the sender pays all charges, or SHA , as implied the charges are shared, trouble is none of these is an absolute.
I have had clients charged even though I coded payments as OUR, as there is nothing stopping a bank taking a charge, it’s usually 15-30$ approximately but the worst are Japanese banks, they take 1/20th of the total value of the amount being transferred (Japanese interest rates were negative, so they had to find other ways to make money), I have seen charges of 20k$ and more taken….