Crown Currency Exchange (CCE), a provider of cash currency exchange services, has gone into Administration after its bank accounts were frozen by Barclays over the weekend.
It is unclear whether clients will lose any money, but the Administrators have pointed out that it will be some time before any funds are returned to clients who had money lodged with the firm.
CCE offered exchange rates which were often better than the prevailing market rate, if clients were prepared to lodge funds with them for a certain amount of time – sometimes several months. Whether Crown were then using client funds to speculate on the markets or not is unclear, but the old adage that ‘if it seems too good to be true, then it probably is’ may have never been more pertinent.
Anybody using an independent company to exchange currency will no doubt be concerned about these events. However, by ensuring their provider is regulated by the FSA as an “Authorised Payment Institution”, they should be safe in the knowledge that their money is only ever held in safeguarded client accounts and is therefore not at risk.
The FSA Register can be seen at www.fsa.gov.uk/register/home.do, under ‘Payment Services Firm Search’. Note that “Small Payment Institutions” do not need to adhere to the same strict rules as larger “Authorised Payment Institutions”.
Consumers should also be suspicious of any company offering rates better than the mid-market rate shown at www.xe.com or in the newspapers.
“Companies such as Crown seemed to be offering rates which even Roman Abramovich would struggle to achieve, which should ring alarm bells”, said Robin Haynes, Managing Director of independent broker Currency Index.
“By using a company which is fully Authorised by the FSA, and does not speculate with client funds or demand to hold all of a client’s money for a long period of time, consumers should be safe in the knowledge that they can achieve competitive exchange rates without compromising security.”
If you have been affected by CCE going into Administration, contact the Administrator via the link on their website at www.crowncurrencyexchange.com
