The U.K.’s consumer watchdog has accused three money transfer firms of price fixing.
The Financial Conduct Authority (FCA) alleged on Wednesday January 25 news release that Dollar East, Hafiz Bros Travel & Money Transfer, and Small World Services fixed prices charged to Glasgow customers who wanted to send money to Pakistan.
As a result, the agency said, those consumers might have been overcharged, though it is unclear if any laws were broken.
“It is the FCA’s view that, for a period in 2017, the 3 firms coordinated on the exchange rate offered to consumers for converting U.K. Pounds into Pakistan Rupees in transferring money to Pakistan,” the authority said.
It added that the companies “fixed the level of a flat rate transaction fee charged to consumers when making money transfers from the U.K. to Pakistan via Small World’s services.”
The FCA said its findings are “provisional” and may not lead to further enforcement, and were issued to notify the company the authority thinks they have infringed on competition law.
The authority’s findings come a little more than three months after the U.S. Consumer Financial Protection Bureau (CFPB) announced a $950,000 penalty against Choice Money Transfer, which merged with Small World in 2011.
According to PYMNTS report, the CFPB said the company failed to accurately share crucial prepayment information with remittance senders, including transfer fees, current exchange rates, and the date the recipient would get their funds.
Choice Money told PYMNTS that it had “acted swiftly and thoroughly addressed the findings identified by the CFPB.”
The CFPB has been stepping up its oversight of companies that currently provide money transfer services.
It’s a massive market, with remittances to low-and-middle-income countries totaling $626 billion last year, according to the World Bank. The U.S. is the world’s largest “sending” country, with $72 billion moving overseas.
The CFPB is considering restrictions on the fees charged on each transaction as workers and families send money to one another across the globe. The bureau is also examining the differences among money transfer companies over disclosure of exchange rates and fees — and whether those fees comply with the agency’s remittance rules.