With peoples' holidays ruined and property deals destroyed, it will take time for the dust to settle following the recent collapse of Crown Currency Exchange.
The Hayle-based currency trading firm was placed in administration owing creditors more than £20m and with just £2m in its bank account. Some of the 13,000 victims have already hired lawyers to fight their case. The local MP for Camborne and Hayle, Conservative George Eustice, has asked the Government to review the Financial Services Authority's role in regulating this industry.
It will be a long fight. For the UK money service business, the largest in Europe with more than 1,500 registered "money transmitters", it may be equally difficult to overcome the serious concerns people will now have about the wisdom of using foreign exchange companies.
Rupert Lee-Browne, founder of the Caxton FX currency firm, said: "Crown's collapse has certainly not done the market any good at all."
It's all the more unfortunate given some industry operators saw it coming more than a year ago and raised concerns with the FSA. However, Mr Lee-Brown, also vice-chairman of the UK Money Transmitters Association, said some of the onus of must fall on customers.
First, they should check their money is in a "segregated" or "client" account. Second, check the company is authorised by the FSA and not just FSA-registered, as a registered firm only has to prove to the FSA that it is registered in the UK. And third, ask to see the firm's accounts.Reuse content