Warning About Misleading FX Exchange Rates

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Advertising watchdogs are warning expats to watch out for misleading foreign exchange rates quoted by currency brokers.

The alert from the Advertising Standards Authority comes after broker World First was rapped for displaying exchange rates that were unavailable to customers on their web site.

Rival foreign exchange firm Eris FX complained after realising customers changing currency with World First would not receive the advertised rates.

World First quoted interbank offer rates to customers, but interbank rates are only available to large financial institutions trading in huge amounts of foreign currency.

World First showed FX savings based on the interbank rates and invited customers to call for a quote.

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Confusing rates

The firm told the ASA that customer dealing rates were higher than the interbank offer rate, but that quoting the customer rate was confusing as different customers were offered varying rates depending on the amount they wished to convert and whether they were individual or corporate customers.

Although World First changed their online calculator, the company agreed rates quoted on their web site were not achievable for many customers.

­The ASA upheld the complaint on the grounds that the currency rates offered to customers were not based on the dealing rate and that saving claims against rates offered by rival companies were unachievable and misleading.

World First was also told only to offer a currency convertor that showed actual rates applicable to customers on their web site.

Contradictory information

“We noted the interbank offer rate was applicable to some customers and should be on the web site, but the advertising was aimed at showing customers how much they could save rather than just supplying current market data,” said the ASA ruling.

“The way the information was displayed implied the rates offered were available to customers, which was misleading.

“Even when the calculator was adjusted, we believed the rates offered were contradictory and confusing to customers who would expect to receive the rate quoted even though they were invited to call for a personal quote believing the rates displayed were achievable when they were not.”

The ASA also warned that currency convertors should show the latest rates and offers applicable to customers even though the foreign exchange market moved quickly and rates fluctuated throughout the day.

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