Bank customers advised to challenge transfer ‘rip offs’
Although the UK has left the EU, Britain remains a member of the Single Euro Payments Area
SPANISH banks which are charging residents for money transfers up to €50,000 from the UK at a higher rate than they charge for national transfers ‘are doing so unlawfully’ if the transfer is completed via IBAN.
This was the assessment made by the co-founder of the now-defunct British Expats Association, David R. Burrage.
He advised that Britons who have been ‘ripped off’ in this manner should first check with the ‘source’ so as to ensure they are forwarding money by IBAN and not SWIFT, ‘as banks are permitted to charge with the latter function which relates to world-wide transfers’.
Mr Burrage noted that the transfer procedure falls under EU rules, namely Regulation (EU) No 260/2012, which amended earlier rules on charges for cross-border payments in euros – and ‘there are penalties for a bank’s failure to comply’ under Article 11 of the Regulation.
Even though the UK has left the European Union, Britain remains a member of the Single Euro Payments Area (SEPA).
International business magazine Finance Monthly notes that refusing to accept payment from the IBAN code of a SEPA member ‘is a violation of EU rules’.
They added: “Some European banks, notably in Spain and Italy, have introduced recent charges to payments coming from or going to the UK.
“These new fees can vary from an €18 flat charge to a percentage of the amount shared or received, ranging from 0.30.5%, which can add up to a significant figure.”
A British resident in Alicante province commented: “We know of one Spanish bank which obeys the EU ruling and they make no charges on interzone IBAN transfers up to €50,000.”
He noted that the worst hit by the charges were the elderly.
“Charging British pensioners €18 to receive their payments in Spain direct from UK is more than disgusting,” he stated.
He added that it seemed the Bank of Spain was not now forcing banks to the respect the EC Regulation.
No discrimination rule
The European Commission (EC) states that Regulation (EC) 924/2009 on charges for cross-border payments in euros requires banks not to apply higher charges than those for domestic electronic payment transactions.
Mr Burrage further explained that in accordance with the current Regulation (EC) 260/2012 no bank charges higher than those for domestic transfers charges may be made when using the IBAN transfer scheme on single money transfers up to the value of €50,000.
He added that the ‘complaints procedure’ is set out in Article 12 of the regulation.
An International Bank Account Number (IBAN) uniquely identifies the account of a customer at a financial institution, he explained – and IBANs identify individual bank accounts for domestic and international payments.
“They’re mostly used in Europe, but other countries around the world are starting to adopt the same system,” he noted.
“SWIFT codes identify bank branches for international payments. They’re used all over the world. However, unlike the IBAN code, there is no apparent control over bank charges for the SWIFT transfer scheme.”
Mr Burrage added: “Concerning any bank charges made when transferring money from the UK to say Spain, it matters not that the UK is no longer a Member State of the EU, as the UK continues to remain within the meaning of SEPA.”
He added: “Therefore, any charges made for transfers from the UK to another SEPA country come within the meaning of the above EU Regulation and those who have had such charges wrongly applied should first seek a refund from their bank.”
They should quote the Spanish version of the Regulation – Reglamento (UE) nº 260/2012 del Parlamento Europeo y del Consejo, de 14 de marzo de 2012.
“In the absence of a satisfactory response, the next step is to rely on its Article 9 which sets out that Member States shall designate the competent authorities responsible for ensuring compliance with this Regulation,” he noted.
To obtain the address of the relevant office in the reader’s area of Spain contact Europe Direct on freephone at 00 800 67891011.
Transfer option
Mr Burrage added that Britons wanting to receive cash from the UK have the option of using ‘one of the many money transfer companies, as a number of them not only guarantee no charges, they also guarantee to offer the spot market rate’.
He noted that one such company allows for UK pensions to be paid direct to them and then users can ‘transfer money when the spot market rate is most favourable and in any event you will get a better rate when receiving your pensions on a four weekly or monthly basis’.
“Once your accounts are set up then all it takes is a phone call or email,” he said.
He added: “Those choosing to use such a service should first enquire as to what type of service and guarantees they offer.”
SEPA
The European Commission (EC) states in a press release that the Single Euro Payments Area (SEPA) ‘harmonises the way cashless euro payments are made across Europe’.
The SEPA covers the whole of the EU – and countries and territories including the UK, Andorra, Iceland, Norway, Switzerland, Guernsey, Jersey and the Isle of Man.