According to expert Forex consultancy, 1st Contact, a multitude of foreign exchange and money transfer companies are guilty of making false claims that lure unsuspecting consumers into misleading territory. These misleading claims have been seen in the advertisements of various Forex companies that promise ‘inter bank’ exchange rates to individuals that are simply impossible to secure. This has resulted in grave disappointment when the actual funds that clear into the individual’s bank account are less or different to what they had originally anticipated.
Ernst Janse van Rensburg, 1st Contact Forex manager explains that ‘interbank rates’ are exchange rates that the banks use to trade with each other. No individual consumer could ever hope to secure this rate. The difference between the actual rates that consumers receive and the interbank rate is termed the ‘spread’. The spread is thus the profit that money transmitting companies would make from consumers.
“interbank rates’ are exchange rates that the banks use to trade…”
Janse van Rensburg says “Forex and Money Transfer companies make a profit by reselling Forex at a higher rate than what they purchased it for and the inter bank rate is what they have purchased it at. It is therefore logical to conclude that inter bank rates are simply inaccessible to consumers”.
Janse van Rensburg further explains that exchange rates are changing every second, where markets can move by 2% in ten minutes. As such it is impossible for most providers to guarantee a fixed rate to an individual, as by the time the funds have cleared into their bank account; the exchange rate would have changed (which could either be favorable or unfavorable, depending on market related conditions). It can therefore be stated that market fluctuations create risk in money transfer initiatives.
1st Contact has engineered an industry first online platform, enabling consumers to transfer their money to international destinations of their choice through the use of their debit cards. The system ensures an instant transaction, as once the transaction is completed, currency is bought instantly (there are no time differences). This takes away all of the risk associated with transferring money to international destinations together with securing preferable rates.
1st Contact urges individuals to be aware of any Forex companies that advertise inter bank rates, as not only does this lack transparency, but these rates are impossible to secure. 1st Contact strongly advises consumers to always double check whether the rates advertised are inter bank rates or the actual rates that will be secured and reflected in their bank accounts.
For more information on Forex related issues or to initiate an online money transfer transaction, please visit www.1stcontactforex.com
0800 856 2470 (free phone within the UK)
1800 835 148 (free phone within Australia)