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fatsam

International Money Transfer (Uk - Korea), 3Rd Party Withholding Funds.

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Hey all, not sure if anyone has a clue about this kind of thing but it's worth a shot.

My current predicament is as follows. 3 weeks ago i attempted to transfer a large amount of money (to me at least) from the UK to South Korea using a large well known currency broker in the UK. The transfer required the use of an intermediatry bank who (from what the curreny broker tells me) are still holding the funds.

Anyway, about 12 days ago now the Intermediatry bank informed the currency broker that the exchange could not take place because it was over the threshold that someone could transfer into a personal account and that they would be returning the funds.

Fast forward to today and the currency exchange company has not recieved the funds back and is telling me that they see no signs that the funds are on there way only that the intermediatry bank is in the process of returning them. The currency exchange company is telling me they have sent numerous messages to the intermediatry bank asking for return of funds and that i need to just wait it out.

I'm just wondering if i have any rights in this situation or whether its as i fear that i am just buggered and need to sit around and wait for them to be so kind as to return my life savings when they feel like the exchange rate suits them and they have finished playing around with my money. I have a pregnant wife and it's causing her and me both a bit of stress, bit of a long shot but i figured over the years of reading this site there might be some kind soul who understands these situations a bit better than myself.

Thanks in advance

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When I read things like this I am just thankful that I never venture out of the West Riding.

Hope you get your money back soon - and next time try them with £10 first, just to see that it works.

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I have actually used this company alot before, just with smaller figures.

So now they are telling me that i have to accept a substantially lower sum than i transfered to them (Uk currency broker) because of international exchange rates.

I locked in a rate with this company and as far as i can see they have been unable to provide the service they are advertising. Now after 3 weeks of being messed around they are trying to give me back alot less than i originally gave them due to the korean won rising.

I dont know the legal ins and outs of all this but i surely feel like i'm getting shafted, doesn't seem right that they can do this i'm sure they wouldnt give me more money back if the exchange had gone the other way. Anyways i am basically refusing the money until they give me back what i transfered to them.

will keep you posted

Edited by fatsam

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I would imagine that if they were unable to do the transfer then you should get back the same amount in Pound sterling as you put in. i.e. you wanted to exchange £10000, you should get back £10000. In your eyes they never did an exchange and you never received any Korean won. This risk should be theirs. Of course if you try another transfer with a lower amount at this time, you will now have a worst exchange rate, you lose out, but such is life. It could have equally gone the other way.

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How thoroughly unpleasant - you have my sympathies and I really hope you get all your money back. I remember trading forex as being the utterly lawless wild west of trading and even these days it's probably still standard practice to do things like front run your clients into trades and manipulate markets on Sunday evening. The odd multi-million dollar light slap form the regulators won't have done shit.

Your best bet will probably be to lean on the UK forex trader who will probably be subject to our consumer laws. Give citizens advice a go - it's free and they'll quickly tell you whether you have anything to go on or not. I definitely see it as the forex traders job to protect you from this sort of ******** which is why they get to collect a massive fat spread on the trade. Bearing in mind actual forex trades at a spread of pips or around 0.00001 units they get a relatively fat cut to covert all the dodgy stuff that happens in the curve. I remember the amount of work I used to have to put into avoiding getting ripped off by intermediaries and even after halving the trading costs the traders were still getting presents at christmas that said "we f****d you".

Good luck!

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I think that you need to break this down and ask them piece by piece questions. There are a number of steps here and every stage should be examined as to whether the bank did the right thing:

What currency did you ask the broker to transfer? This might be important. Also what does the intermediary mean that the exchange could not take place - which exchange? Vitally, was an exchange to KRW actually ever made and if so at what date and what rate?

What is the threshold to which they refer and was there any way that you could have known about it? Could or should either the currency broker or intermediary known about this threshold prior to taking the order? When and how was it established that you had exceeded this threshold and what immediate steps were taken to remove any currency carry risk from you, the customer?

So now they are telling me that i have to accept a substantially lower sum than i transfered to them (Uk currency broker) because of international exchange rates.

I locked in a rate with this company and as far as i can see they have been unable to provide the service they are advertising. Now after 3 weeks of being messed around they are trying to give me back alot less than i originally gave them due to the korean won rising.

I dont know the legal ins and outs of all this but i surely feel like i'm getting shafted, doesn't seem right that they can do this i'm sure they wouldnt give me more money back if the exchange had gone the other way. Anyways i am basically refusing the money until they give me back what i transfered to them.

The KRW has fallen about 3% in the last month but the note from the intermediary suggest than there was no exchange done - what dates and rates were the buy and sells done on? Do they fall within the daily range or is one of the counterparties taking liberties on spread? Likewise, the delay between the purchase and sale (3 weeks or more it seems) needs to be explained.

One theory I have is that the currency broker converted GBP into USD and sent these to the intermediary. The intermediary sat on USD but couldn't make the FX to KRW (because of the limit). USD sent back adn FX'd to GBP. You are seeing the GBPUSD movement plus buy/sell spread in your loss. It is unreasonable for you to carry cable (GBPUSD) risk - but it is not unreasonable for you to carry KRW risk (if this makes sense).

Do find out exact numbers from where these losses came - if they came from the KRW transaction, quiz them on timing and also whether it was reasonable. This threshold needs further exploration as well - if this government or the counterparties own (if the latter you should not suffer any losses). I used to trade KRW off the back of equity transactions and you couldn't make the deal without a license number and trade - so I think that it would have been very difficult for them to do it if you exceeded some government regulation threshold. And if the losses came from something else (see theory below), then .... In any event, lots of points to challenge them on.
Sorry if I have laboured a few points- difficult editor to use.

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Thanks for all these great replies.

In response to your question Maursh I basically transfered gbp to the currency exchange firm who were supposed to pay a fixed sum into a korean bank account in korean won. After locking in the deal I was told that an intermediatry bank would be involved. From what i could gather the currency exchange firm told me that they purchased my korean won from this third party bank who then were unable to proceed with the transaction because they said the amount was too large to be sent as a personal payment.

This 3rd party bank which is US based was then requesting additional documents from my wife via the korean branch of there bank, however this proved to be irrelevant as the exchange could still not take place. It seems to me that the 3rd party bank just held onto the money for far too long, all the time the exchange rate was changing and obviously the amount in sterling that would be returned was falling.

Will be speaking to them again next week and have alot more questions and points to raise with them, thanks alot for all the help I really appreciate it.

Edited by fatsam

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After speaking to their manager they have agreed to refund me the difference after investigating calls made with me where one of their staff told me that i would recieve back the amount that i gave them, hope she doesn't get her **** kicked too bad for it. I have re-sent the funds using this company in smaller amounts to different accounts that doesn't break any transaction limits. I have actually come out of this making a decent proffit even if lost about 5 years from my hairline.

Thanks for all the information from fellow posters, it made me feel alot more confident when dealing with them.

Edited by fatsam

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