Seven tips to help ensure that your international money transfer is secure
As an expat, international money transfers are frequent occurences. These are our tips to help ensure that your transactions are secure.
Written by Michael Kent on 30 January 2015
Undertaking international money transfer comes with its own inherent risks, especially in these times of highly sophisticated fraud cases. If you are an expat, the risks are greater as one has to regularly send money to friends, relatives and loved ones during emergencies, to pay bills, as gifts, and so on. To ensure that your transactions are secure, the following tips will help set you in the right direction:
Compare transaction costs
Comparing the costs of sending money abroad is a crucial part of ensuring that the transaction goes on as expected. One of the ways to achieve this is by using comparison sites. They usually list the number of companies undertaking money transfer services and their corresponding charges. These usually include a multitude of fees and commissions that can apply to both the recipient and sender. However, when manually comparing sites, one of the key elements to look out for, is usually the number of small surcharges, usually designed to hide the true overall cost of the transaction. Another aspect to look at is the exchange rate. Some companies and banking institutions can claim to offer free money transfer services, but have considerably high exchange rates. In regards to this, it is usually hard to compare the rates on a daily basis as some providers publish them on a weekly or monthly basis. The manual process should preferably be done over a specific period, say one week and then done again moments before the actual transaction takes place. When all is said and done, the only way to find out which company or agency is best, is to calculate all costs of using each, including the exchange rate to find out the total.
Compensation in case something goes wrong
If you are transferring money using a UK bank savings account, you are most likely to be covered by a protection scheme that protects you in case the institution goes bust while your money is still in the pipeline. However, when using money transfer companies, this extent of protection is not available, and so there are no guarantees that you will get your funds back, if things go south. There have been regulatory standards imposed on such institutions over the years, but don't cover all areas. Going a bit into the details, firms making over 2.4 million pounds a month usually have to receive mandatory authorization (are classified as 'authorized') from the Financial Conduct Authority, and are obligated to separate your money from theirs at the end of each day - a process known as ring fencing. This ensures that your money is safe, even if the business goes down. However, small companies that are only 'registered' have no such safeguards.
Regularly check your bank statement
When sending money overseas, the companies undertaking the transaction may disguise certain charges in their fine print leading to recurring costs, such as 'membership fees', of which you may have no idea about. One of the best ways to be certain that this is not happening is to check your monthly statements for credited amounts to companies you do not recognize, and if you find one, contact the bank connected to the card and request that these are stopped.
Make sure that you only deal with reputable companies
When buying goods online or utilizing money transfer services, one is exposed to a lot of potential fraudsters, and one way to make sure that your transactions are secure is to use companies that have a good reputation. To verify their credibility, you can do an online search for reviews of the company. This will help you gain insight on what others have to say based on their experiences. You can then make your own assessment of the risks and determine whether it is still okay to use their services.
Don't reply to messages requesting for personal information
It is no secret that fraudsters are becoming more cunning by the day, and getting even a fringe of your personal details can help them get even more information about you, that may potentially help them gain access to your financial data, and consequently your funds. As a result, it is imperative that you do not reply to any emails or text messages requesting personal information. However, if an email or message looks genuine, you can contact the company directly. For example, if it seems to come from your bank, give them a call to ask if they have sent the concerned request.
Don't play foreign lotteries
There are usually a lot of tempting ads online and spam mails promising a lot, if you play a suggested lottery. But to begin with, it is illegal for UK citizens to play foreign lotteries, and if you win, you will have to pay taxes on the winnings. Collecting the price is usually one of the tactics that fraudsters use to take money from your pocket. Victims are usually requested to make payments to facilitate the transfer of the funds and once they do, the money is never sent, and the much they have used during the whole process, is gone in a flash.
Making wire transfers
A wire transfer is the riskiest mode of making payments and is usually the most preferred by con-artists. Why? Because once the funds have been sent, there is no way to reverse the transaction or means to trace the money after it has gone to the recipient's account. As such, if you are utilizing this means, always make sure that the person you are sending the money to is someone that you know and trust, and stay away from traders who insist on receiving funds only through wire transfer.