UK bank transfers cost most

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BRITISH banks charge more to send money across borders than any others in the European Union, according to a new survey by the European Commission.

The Commission also found that a transfer between member states costs, on average, 25.4 per cent of the sum being transferred.

The research was compiled from 352 bank branches. The Commission demanded more than 1,000 urgent and more than 100 non-urgent money transfers from these. It found that on average it cost less to send money marked as non-urgent - and took less time. The average total transfer cost for an urgent transaction of pounds 80 was pounds 20.32.

The main component of this cost, the 'sender fee', averaged pounds 17.92, with pounds 2.08 for double charging or what the Commission calls 'unauthorised deductions' and another 32p for 'foreign exchange margins'.

All the banks were ordered to charge the sender all costs for the cross-border transfer so that the beneficiary received the full amount. But in 36 per cent of the urgent transfers, double charging occurred.

British banks were not the main culprits when it came to double charging: a Commission official identified Greece, Ireland and Spain as the worst offenders, with Portuguese, Belgian and Danish banks double- charging the least.

But on the big cost, the sender fee, UK banks charged the most, followed by France and Portugal. British banks were also among the most expensive on foreign exchange margins, second only to Greece and just ahead of Belgium.

When all elements of the transfer costs are put together, the most expensive banks were the French, followed by the British and the Greeks. The cheapest were in Luxembourg, Holland and Italy.

The Commission said that the amount of double charging had fallen very slightly when compared with a survey conducted last year, but that it was still way above the 10 per cent maximum it had expected to find.

EU consumer affairs ministers are expected to discuss the problem in Luxembourg later this month. They will have the support of UK banks for the removal of hidden charges.

Commissioner Vanni d'Archirafi, in charge of financial services and the internal market, said the results of the survey were disappointing.

'The Commission is now in a position to decide on the most appropriate action to take,' he said.