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Customer from UK complains of high banking fees
Thread poster: Heinrich Pesch

Heinrich Pesch  Identity Verified
Finland
Local time: 22:47
Member (2003)
Finnish to German
+ ...
Mar 10, 2007

One customer wrote today, that her bank charges 25 - 50 GBP for a transfer to my Finnish bank account.
Other customers from UK never seem to have any difficulties using IBAN-transfer. Is Britain somewhat an exception, because everywhere else in the EU wirie transfer is free or very cheap.
Which banks in the UK can you recommend?
Cheers
Heinrich

[Subject edited by staff or moderator 2007-03-10 22:00]


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Andrzej Lejman  Identity Verified
Local time: 21:47
German to Polish
+ ...
Yes, they are known for extremely high fees Mar 10, 2007

But 25 - 50 GBP are an injustice crying for vengeance.
1) Use PayPal / Moneybookers instead.
2) Advise you client to use the option "Share". They pay their bank fees and you pay yours. Maybe your bank has moderate fees for receiving payments from abroad. Than you will pay your bank's fees only. This works in my case very well, since my bank does not charge for receiving payments at all. Due to this, when I invoice 100,00 €, I receive 100 €.
But we have here in Poland one of the most advanced banking system in the world and UK banks are still behind the times. Some of my UK clients are still offering me checks, that are out of use here.

Anyway, you're right - this fee is pure thieving - don't accept it.

Regards


Andrzej


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Manuela Junghans  Identity Verified
United Kingdom
Local time: 20:47
Member (2004)
English to German
+ ...
Hi Heinrich Mar 10, 2007

Yes, it´s true, banks in the UK charge horrendous amounts for transfers to other European banks. E.g. my UK bank, which is the BOS, charges GBP 17.50 for a transfer to my German bank account (regardless of the amount you are transferring). But I think they are rather on the low end of fees. I could imagine that some "more reputable" UK banks charge even more, although GBP 50 seems very high.
A solution, as has been mentioned before, could be PayPal. Another, yet a bit complicated solution would be opening a UK bank account. But this would only pay off if you have a lot of UK customers, though. I would not accept a cheque from a UK bank, because cashing it at your Finnish bank will be very expensive as well.

Manuela


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Charlie Bavington  Identity Verified
Local time: 20:47
French to English
Don't overlook the following! Mar 10, 2007

I'm not going to defend the amount of the charges particularly.

Don't overlook the fact that there is a currency conversion involved when transferring money to or from the UK. That is, I would imagine, the reason it costs more than you may be used to elsewhere in the EU.

There is also the "bigger picture" to be considered. Banking in the UK is largely free, in very general terms.

We don't pay the bank a set amount each year, just for the privilege of being allowed to bank with them.

Domestic transactions - cheques, credit transfers, standing orders, cash withdrawals, etc. are free (as long as you are in credit)

There is no fee for merely keeping a cash-card (for ATMs) in your wallet.

Interest (not very much, for sure) is paid on credit balances in current accounts, which is actually illegal in some countries.

It is only "unusual" transactions (and operating an account that is overdrawn i.e. in debit) that attract charges, and this is where the banks make money,and lots of it. Unfortunately, this includes transactions involving currency conversions, and this is the only aspect that you see, obviously. Currency charges are the ONLY money my UK bank (HSBC) takes from me. Sadly, I cannot say the same thing about bank accounts I hold elsewhere.

So, although you may feel it is a little tough having to pay such amounts, that is because you are only seeing one small aspect. Generally, if you know how to manage your finances properly, UK banks are actually pretty good value compared to banks worldwide (so I am led to believe ).


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Ivana UK  Identity Verified
United Kingdom
Local time: 20:47
Member (2005)
Italian to English
Transferring funds from a UK sterling account to any non-sterling account Mar 11, 2007

will always incur a one-off charge (the amount of the charge depends on the amount being transferred) PLUS a currency conversion fee. Different banks have different charges, but the standard range is in fact £25-50.

Within the euro zone transfers from one euro account to another are fee of charge - unfortunately this doesn't apply to the UK as our currency is still the British pound.

Hope this helps to clarify!


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Heinrich Pesch  Identity Verified
Finland
Local time: 22:47
Member (2003)
Finnish to German
+ ...
TOPIC STARTER
Thanks for the info Mar 11, 2007

I had already agreed to using Paypal. I just found it different to understand, because even from the US and India customers pay me in Euro directly to my account. But I don't know if they have to pay for it. Of course its the customer that has to pay for the transfer fees. When accepting a job offer I never would understand, if I had to pay for the banking fees of the customer.

In reply to Charlie: in the Euro zone banking is practically free too, banks draw there income from the difference between interest rates.

Happy banking!

Heinrich


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Harry Bornemann  Identity Verified
Mexico
English to German
+ ...
The costs of cheap solution.. Mar 11, 2007

Using PayPal, you pay a 3.9% fee for receiving money.
For $1000, this makes $39.
This is one of the reasons why I recently asked a customer from the U.S. to rather deduct his $35 wire transfer fee from my invoice than to send the money via PayPal.
He also told me that a wire transfer (U.S. to Europe) in other currencies than USD costs only $10, which means that when I receive the EUR remuneration for more than one long day of work, PayPal is too expensive.


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Sergei Tumanov  Identity Verified
Local time: 22:47
English to Russian
+ ...
certain doubts exist Mar 11, 2007

Andrzej ... Than you will pay your bank's fees only. This works in my case very well, since my bank does not charge for receiving payments at all.


receiving party will pay 6.75 euro here

Moneybookers can be the right solution. I had one client from UK, who asked me to accept payment via MB.

MB charges are more favourable to a user, than ones of Paypal

A sender pays maximum 0.5 euro per payment
A receiver pays nothing, he/she pays only 1.80 euro when money are withdrawn to a normal bank account.

[Edited at 2007-03-11 11:22]


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Anjo Sterringa  Identity Verified
Spain
Local time: 21:47
Member (2003)
English to Dutch
+ ...
Yep Mar 11, 2007

One 'big' UK client made the mistake to send me a cheque - cost me EUR 12 to cash a miserable EUR 42...
They do have a euro account, however, and made the second payment through that account.

Another client paid me through Moneybookers, I set up an account even though I have Paypal because MB turns out to be much cheaper.

A third client, a small agency in the UK, has now finally solved the problem by using American Express to transfer euro amounts into my bank account - don't ask me how it's done, but I receive the amount in euro without any deductions.

A fourth client in the UK insists on being charged in GBP which involves converting my euro charge to GBP and then adding the equivalent of the bank costs on my side (EUR 20.50 for the conversion and for receiving a non-euro transfer - Spanish banks make lots of money as well!!) and increasing the word rate proportionally.

My favourite international client in the UK has never made any mistakes, they just send me the money in euro and even send me a 'remittance advice' announcing the transfer by snail mail.

So, you are not alone....


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Giovanni Guarnieri MITI, MIL  Identity Verified
United Kingdom
Local time: 20:47
English to Italian
yep n.2 Mar 11, 2007

just paid £21.00 for the privilege... but it's true what Charlie says: banking in the UK is almost free...

Giovanni


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Russell Jones  Identity Verified
United Kingdom
Local time: 20:47
Member (2004)
Italian to English
Options Mar 11, 2007

The high costs are because bank transfers are rare within the UK, except for urgent payments (or on-line banking). Otherwise, cheques are used.
My bank (Lloyds TSB) offers a £10 service for transfers to European banks within 3 to 5 days but it can only be done at a branch, waiting for a clerk to fill in the form by hand and all codes etc. must be perfect or the fee will double.


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Jan Sundström  Identity Verified
Sweden
Local time: 21:47
English to Swedish
+ ...
Cherry picking... Mar 12, 2007

Charlie Bavington wrote:

Don't overlook the fact that there is a currency conversion involved when transferring money to or from the UK. That is, I would imagine, the reason it costs more than you may be used to elsewhere in the EU.

There is also the "bigger picture" to be considered. Banking in the UK is largely free, in very general terms.

We don't pay the bank a set amount each year, just for the privilege of being allowed to bank with them.

Domestic transactions - cheques, credit transfers, standing orders, cash withdrawals, etc. are free (as long as you are in credit)

There is no fee for merely keeping a cash-card (for ATMs) in your wallet.

Interest (not very much, for sure) is paid on credit balances in current accounts, which is actually illegal in some countries.

It is only "unusual" transactions (and operating an account that is overdrawn i.e. in debit) that attract charges, and this is where the banks make money,and lots of it. Unfortunately, this includes transactions involving currency conversions, and this is the only aspect that you see, obviously. Currency charges are the ONLY money my UK bank (HSBC) takes from me. Sadly, I cannot say the same thing about bank accounts I hold elsewhere.



Hi Charlie and all,

Compared to banks in Sweden, we face the same obstacles, but I still don't think the charges are justified. You're being shortchanged in the UK!

Remember, Sweden is outside the Euro zone too.

As I wrote in a previous post (http://www.proz.com/post/503092#503092), by cherry picking between brick-and-mortar banks and no-frills internet banks, you can get the best of both worlds.

For my Swedish account at Skandia I get:
- No charge at all for IBAN transfers, both inbound and outbound. Perfect even for micropayments down to €10. IBAN is implemented in 40 countries, not just EU!
- No annual fee.
- Internet banking 24/7, with customer service on the phone 7 am to 10 pm, free of charge.
- No restrictions or requirements for opening an account.
- No fee to deposit or withdraw cash over the counter.
- No fee for domestic transfers or recurring autogiro orders.
- Interest on positive account balance from the first Krona.
- Up to €10 000 in credit if you need to use it, at no other cost than the actual interest on the loan.

OK, ATM card is optional, and would cost me €25. But then, there are other banks that offers ATM for free, that's where the cherry picking comes in

Maybe there is no bank in UK today offering these terms. But it's just a matter of time. I don't know anything about UK politics, but the situation you describe smells like an oligopole waiting to crack...

Best,

Jan


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Gert Hirschfeld  Identity Verified
Germany
Local time: 21:47
English to German
+ ...
Excessive Charges Mar 12, 2007

Wow Russell, visiting a branch and filling things in by hand. I think we have just entered the ice age. Do they still have those tills where you have to turn a crank to get this nice tinkle? I am (not) amused.

Anyhow, I find 25-50 GBP charges excessive. My internet bank here in the UK charges £8.00 for what they call Structured Payment to Europe, which involves BIC and IBAN numbers. Any charges levied by the foreign bank have to be met by the beneficiary, ie. you.



[Edited at 2007-03-12 11:27]

[Edited at 2007-03-12 11:36]


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Charlie Bavington  Identity Verified
Local time: 20:47
French to English
All true, Jan :-) Mar 12, 2007

Well, apart from the foreign currency transfers, and the fact that it is awkward to open a new bank account over here because of money laundering regaulations (you need passport, proof of address etc etc etc), your situation sounds very similar (except we don't need to cherry pick to get free ATM cards!).

But yes, we do have 4 dominant banks, all very similar in terms of what they offer and what they charge for it. We need a Swedish bank to come here and break the oligopoly:-)

Although changes may be coming. Slightly off-topic for a second: there has been much fuss lately about the charges banks apply to people who go overdrawn. For example, they charge 30-40 GBP for a letter just to inform you that you are in debit. It has recently been established that this is unfair and punative, basically because:
a) customer contracts with the bank tend to say that "administrative costs" will be charged for going overdrawn
b) 40 GBP in no way represents the administrative cost of a computer-generated letter
and therefore
c) these fees amount to a "penalty" which was not stated in the contract and are therefore unfair.
Hence customers are claiming back literally millions of GBP in these charges.
It is rumoured that banks will stop "free banking" (e.g. by charging a flat annual fee) to make up this money.

Perhaps it could also be established that charging 25-50 GBP for a foreign currency transaction also in no way reflects the actual cost, is punative, and therefore unfair?
Of course, the difference is that you, the customer, are aware of the cost before starting the transaction.
Whereas if you go overdrawn, you don't know exactly how much it will cost until the bank starts applying its "administrative charges"...:-(


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Daina Jauntirans  Identity Verified
Local time: 14:47
German to English
+ ...
US to Europe = $40 Mar 12, 2007

Heinrich Pesch wrote:

I just found it different to understand, because even from the US and India customers pay me in Euro directly to my account. But I don't know if they have to pay for it.



Yes, we have to pay about $40 to send a wire transfer from the US to Europe. I have to pay $10 just to receive a wire transfer from Europe. Still, the UK fees seem very steep.


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