Financial Conduct Authority sets expectations for clearer disclosure of international payment costs under the Consumer Duty

The Financial Conduct Authority has published examples of good and poor practice on how firms communicate the cost of international money remittance and cross-border payments, aiming to improve consumers’ ability to understand and compare charges before committing to a transaction. The publication is framed around the Consumer Duty’s requirement that communications be clear, fair and not misleading and support retail customers to make effective, timely and properly informed decisions. The examples are relevant to firms authorised under the Financial Services and Markets Act 2000, the Payment Services Regulations 2017 and the Electronic Money Regulations 2011 where payment services offered to retail customers involve a currency conversion. The FCA’s review of a sample of firms’ websites assessed whether pricing information was provided before a transfer was initiated, including disclosure of the amount transferred in GBP, the exchange rate applied, the amount received in the destination currency, markups over a reference rate, fixed and variable fees and total fees. It found that transaction fees and potential intermediary or recipient bank charges were often not shown up front, fee variability was not always clear, and key information could be hard to find; poor practices also included presenting “zero cost” messaging where markups were applied and not clearly explaining that a firm rate embeds a markup. Firms are expected to regularly monitor the effectiveness of their communications under the Consumer Duty and to review disclosures so consumers can understand likely total costs and compare options. The FCA plans to reinforce these expectations through ongoing supervisory engagement and indicates it is likely to undertake further work to assess what improvements have been made.