Using an international money transfer provider is a cost-effective and convenient way to send money overseas from the UK. But how do you know you’ve chosen a safe money transfer company? Here you can learn about what it means to be FCA authorised and how to ensure that your money is safe when it comes to international transfers.
When choosing an international money transfer provider, it is important to check its FCA status.
FCA stands for the Financial Conduct Authority. It regulates financial service companies and financial markets in the UK. All UK-based companies dealing with international money transfers need to either be authorised or registered by the FCA.
In the UK, firms providing international money transfer services are regulated by the FCA under the Payment Services Regulations 2017 and the Electronic Money Regulations 2011, which implement the EU’s revised Payment Services Directive (PSD2). Payment firms must be authorised or registered with the FCA and comply with rules covering customer protection, safeguarding of funds and operational standards.
They may seem interchangeable, but there is actually a clear difference between being FCA authorised and FCA registered.
Being FCA authorised means there are certain safeguards on your money. Any company authorised by the FCA must safeguard your money by keeping it separate from company funds. This way, if it goes bust, you’re more likely to get your money back.
Being FCA registered is a much weaker level of protection for you. To be FCA registered, the company only needs to show the FCA that it is based in the UK and that none of its managers have been convicted of financial crimes. It may also choose to safeguard your money by placing it separate to company funds, but it isn’t obliged to do so by law.
In other words, to ensure the safest possible money transfer from the UK, it is best to opt for a company that is FCA authorised.
If you are unsure whether your chosen international money transfer provider is FCA authorised or just FCA registered, then you can check on the FCA’s Financial Services Register.
If you can’t find it on the register, it doesn’t necessarily mean it’s operating illegally. It may just be based elsewhere.
The next step would be to look at its papers or search for any information on its website to find out where it is based. Or you can call the FCA’s consumer helpline on 0800 111 6768 or 0300 500 8082 from the UK or +4420 7066 1000 from abroad.
If the company isn’t registered with the FCA or an EU regulator, then avoid it. It may be operating illegally and your money will not be protected.
Under the Payment Services Regulations 2017, banks and money transfer companies must give customers clear information before an international payment is authorised.
Before you confirm the transfer, you should be told:
Once a payment has been authorised it is usually difficult to cancel, particularly if it has already been processed. If something goes wrong, you should complain to the provider first. If the issue is not resolved within 8 weeks, you can escalate the complaint to the Financial Ombudsman Service.
Choosing an FCA authorised money transfer provider is one way to keep your money safe. However, money scams are on the rise, so it is important to remain vigilant.
Here are our top tips to help you to avoid money transfer scams:
24% of people who would use a money transfer service said security was the most important aspect in choosing a brand.
| Response | 55+ | 45-54 | 35-44 | 25-34 | 16-24 |
|---|---|---|---|---|---|
| Security | 28.27% | 20.79% | 23.33% | 23.39% | 22.34% |
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