Money Exchange Rip Off

[sonicdragon]

sonic,

your avtar says it all really.

Yeah, I should have given up several posts back.....

[samran]

sonic,

your avtar says it all really.

Yeah, I should have given up several posts back.....

as you said earlier, we are getting into the realms of financial alchemy here.

I might as well post a recipe for turning lead into gold.

[PCA]

sonic,

your avtar says it all really.

Yeah, I should have given up several posts back.....

as you said earlier, we are getting into the realms of financial alchemy here.

I might as well post a recipe for turning lead into gold.

yes little Mod, you are the best.

[samran]

sonic,

your avtar says it all really.

Yeah, I should have given up several posts back.....

as you said earlier, we are getting into the realms of financial alchemy here.

I might as well post a recipe for turning lead into gold.

yes little Mod, you are the best.

As I have said elsewhere, I don't hide behind my moderator status, unless forum rules have been broken. I am a big boy, and will take the hits. No need to refer to my mod status. I also like intelligent discussion rather than one liners telling me that I am wrong. I am happy to admit I am wrong, all I want is a proper rebuttal based on informed opinion, to which you have not been able to offer.

So again, how is it possible for a bank to:

a) commit fraud and

B ) get around the onshore/offshore market difference to make a profit.

[PCA]

sonic,

your avtar says it all really.

Yeah, I should have given up several posts back.....

as you said earlier, we are getting into the realms of financial alchemy here.

I might as well post a recipe for turning lead into gold.

yes little Mod, you are the best.

As I have said elsewhere, I don't hide behind my moderator status, unless forum rules have been broken. I am a big boy, and will take the hits. No need to refer to my mod status. I also like intelligent discussion rather than one liners telling me that I am wrong. I am happy to admit I am wrong, all I want is a proper rebuttal based on informed opinion, to which you have not been able to offer.

So again, how is it possible for a bank to:

a) commit fraud and

B ) get around the onshore/offshore market difference to make a profit.

no fraud, all legal for banks. That you dont know how and why is because you have no insight about banking and the way banks book currency deals. As a customer you have the choice where you want to have the dosh exchanged and accordingly you will get the appropriate rate. If the customer is stupid and decides to get the money changed before it gets transferred he will get the bad rate and the bank will book it accordingly transparent for the customer. Next step is that this transaction is marked into a kind of "virtual stock" if you want to call it so and later or anytime of their choice they will make the real deal on their own behalf and cashing in the profit of the difference.

[sonicdragon]

sonic,

your avtar says it all really.

Yeah, I should have given up several posts back.....

as you said earlier, we are getting into the realms of financial alchemy here.

I might as well post a recipe for turning lead into gold.

yes little Mod, you are the best.

As I have said elsewhere, I don't hide behind my moderator status, unless forum rules have been broken. I am a big boy, and will take the hits. No need to refer to my mod status. I also like intelligent discussion rather than one liners telling me that I am wrong. I am happy to admit I am wrong, all I want is a proper rebuttal based on informed opinion, to which you have not been able to offer.

So again, how is it possible for a bank to:

a) commit fraud and

B ) get around the onshore/offshore market difference to make a profit.

no fraud, all legal for banks. That you dont know how and why is because you have no insight about banking and the way banks book currency deals. As a customer you have the choice where you want to have the dosh exchanged and accordingly you will get the appropriate rate. If the customer is stupid and decides to get the money changed before it gets transferred he will get the bad rate and the bank will book it accordingly transparent for the customer. Next step is that this transaction is marked into a kind of "virtual stock" if you want to call it so and later or anytime of their choice they will make the real deal on their own behalf and cashing in the profit of the difference.

By "virtual stock" I think you mean "suspense account" ? I'm beginning to get a better understanding of your meaning. You seem to be saying that they actually sent AUD to thailand either to their own affiliate correspondent bank who would then make a transfer to the receiving bank, or directly to the receiving bank.

Is that what you mean ?

[bendix]

I have two persian cats in my apartment. Lovely animals. Smart, energetic, a bit cruel now and again, but they mean no harm.

The other day Mrs Bendix brought home a couple of small mice in a cage. She said it would keep the cats amused when we're not there. She's a thoughtful girl.

The other evening, we experimented and let one of the mice run around the floor. The cats loved that . . you should have seen them playing with the wee fella. Oh how we laughed. We rescued him though, unharmed and unsullied.

I'm sorry. I'm way offtopic but for some reason reading the last few points reminded me of that scene.

[Smithson]

A customer sent me around 2,500GBP, he forgot to tell the bank and they did the exchange in the UK,

He was given a rate of B58, while the onshore rate B69.

As a solution he suggested I send the cash back to him in Baht and it be converted into Sterling in the UK, then he'd send it back to me in Bangkok. I knew it wouldn't work.

Imagine we could do this, and get a rate of 62-65, then we could both make a easy living sending cash back and forward.

[opengoal]

Thanks for all the info its much appreciated. I will have to concede to the banking experts here that the bank has not made excess profit. What is very annoying is that the banks employees are not providing the best service for their customers.

A previous reply in this thread referred to my brother f***ing up. Thats wrong the banks f***ed up by not informing the customer which was his best option. To quote the manageress of the bank " I dont know which is the best way to send money to Thailand". I think she needs a career change.

People go to banks for financial guidance not to loose $1100 bcos of incompetence. This is indefensible

[sonicdragon]

Thanks for all the info its much appreciated. I will have to concede to the banking experts here that the bank has not made excess profit. What is very annoying is that the banks employees are not providing the best service for their customers.

A previous reply in this thread referred to my brother f***ing up. Thats wrong the banks f***ed up by not informing the customer which was his best option. To quote the manageress of the bank " I dont know which is the best way to send money to Thailand". I think she needs a career change.

People go to banks for financial guidance not to loose $1100 bcos of incompetence. This is indefensible

I fully agree, and I recommend that you continue to put this incompetence point to your bank very forcefully, while also reminding them that although you understand that they didn't benefit directly from the onshore/offshore difference, you do know that they made commissions in the exchange offshore which they would not have if they had remitted the funds in A$ to the receiving bank. There is thus a significant conflict of interest for them between providing best service to you, their customer, and maximising their own profit.

[onethailand]

I learned this the hard way... LOL... never ask to send an equivalent amount (ie. I need to send 10000 baht to Thailand) - always say "I want to send x dollars/pounds/yen to Thailand" - and the bank should be obligated to do just that and not convert the currency.

[Maestro]

...never ask to send an equivalent amount (ie. I need to send 10000 baht to Thailand) - always say "I want to send x dollars/pounds/yen to Thailand

Precisely!

And, opengoal, banking is a highly competitive business. It would be asking too much to expect banks to employ tellers who know, or to train them to know, about the difference in exchange rates in Australia and in faraway Thailand, and then to tell a customer who asks to remit a certain Baht amount to Thailand that it would perhaps be better if he sent a specific amount in dollars instead.

You see, in international trade there are many instances when indeed a Baht amount has to be remitted. Let's say a Thai manufacturer exports to Australia. He does not want to be subjected to exchange rate fluctuations. His cost is in Baht, and his price calculation is in Baht. Therefore, he invoices the Australian importer in Baht and the importer obviously will instruct his bank to remit exactly that Baht amount.

For the Australian Bank with whom your brother dealt it would be wrong, it would be an invasion of privacy, to ask him for details about the reason for his remittance and for his choice of currency for the remittance. I know that my Swiss bank would never ask such question. Their job is but to carry out my instructions, exactly as I give them, and I would be offended if they questioned my motives.

--

Maestro

[sonicdragon]

...never ask to send an equivalent amount (ie. I need to send 10000 baht to Thailand) - always say "I want to send x dollars/pounds/yen to Thailand

Precisely!

And, sonicdragon, banking is a highly competitive business. It would be asking too much to expect banks to employ tellers who know, or to train them to know, about the difference in exchange rates in Australia and in faraway Thailand, and then to tell a customer who asks to remit a certain Baht amount to Thailand that it would perhaps be better if he sent a specific amount in dollars instead.

You see, in international trade there are many instances when indeed a Baht amount has to be remitted. Lets say a Thai manufacturer exports to Australia. He does not want to be subjected to exchange rate fluctuations. His cost is in Baht, and his price calculation is in Baht. Therefore, he invoices the Australian importer in Baht and the importer obviously will instruct his bank to remit exactly that Baht amount.

For the Australian Bank with whom your brother dealt it would be wrong, it would be an invasion of privacy, to ask him for details about the reason for his remittance and for his choice of currency for the remittance. I know that my Swiss bank would never ask such question. Their job is but to carry out my instructions, exactly as I give them, and I would be offended if they questioned my motives.

--

Maestro

There are often regulatory/compliance reasons why a bank has to ask the customer for the purpose of the remittance.

I fully agree that many times a specific amount of baht is required at the receiving end. In this case a competent bank should fix the exchange rate with receiving bank, if they have a senior correspondent relationship, and if not then they are arrange the same throught their normal correspondent bank. This is the way large transactions are handled. For personal customers, unless the amounts are large this is usually too much trouble for the bank.

Although banks are in competition, it is very much a cartel, which limits the extent of price and non-price competion between them.

[Smithson]

I've had the same problem with several customers, I quote in $ or GBP, which is what they tell the bank they want to send, but the bank does the conversion themselves. The Royal Bank of Scotland has a box to tick if you don't want them to do the conversion, but they don't point this out to customers.

A bank in the US said it was impossible to send $ without the routing numbers and they couldn't get the numbers themselves. So I had call Bangkok Bank, who told me it's very easy for the banks but they use it as an excuse to make extra cash.

[opengoal]

After rechecking with my brother he tells me he did the same thing 3 times when he went in the bank which was put his atm card under the window with a slip of paper containing all my details. He then told them he wanted to send $5000 or $3000 to that account in Thailand. How can this be misconstrued as send 127,680baht or 78,477.50 baht to that account in Thailand.

On the first occasion dollars were sent so why did they not follow his instruction on the second and third visits. There was no baht specific amount mentioned if that had been the case the figures would be 130,000 and 80,000. Its an absolute nonsense to suggest the bank does not benefit in some way if it does not benefit why not keep the customer happy.

[opengoal]

Why is it that the customer is always stupid or he f***ed up. I am ok with you defending your profession but you have a duty to inform the uninformed like me of my options. If we all had a full working knowledge of the banking system we would be wealthier people..

Agree with you 100% that what the bank does is not illegal and the banks knows that. It is exactly what I said in my original post it is a loophole which all banks abuse bcos they know the customer is powerless to complain after the event.

Why are mortgages covered by a code of practice? It was realised that financial instituions were stiffing the punters left right and centre by selling them mortgages which did not necessaily suit their requirements but made huge profits for the lenders. Unlike foreign exchanges, mortgages affect the masses so governments had to act. Legally not wrong, morally it stinks. Then again when did banks have morals

Edited November 7, 2007 by opengoal

[Smithson]

Is it possible to send Baht to another country e.g. the UK, is so what would the exchange rate be? Considering they were selling Baht for 58, what would the same bank be buying it for?

[bat69]

The easiest way to get around this in the future is to set up International Money Transfer on Internet Banking. I can do this with my Aus bank, it is very easy (only a couple of clicks once the foreign account details are set up) and it gives you the option to send $AUD or Baht.

The only way a bank would be able to profit from sending baht is if they converted the AUD to baht in Aus and then sent the equivelant amount (which would be less) in AUD to the bank in Thailand. This wouldn't really be possible thou as transfers can take up to 2-7 days and the Aus bank could not guarantee the rate the thai bank would give on the particular day when the transfer arrived. Thai banks also charge a fee to receive foreign currency.

[Smithson]

The easiest way to get around this in the future is to set up International Money Transfer on Internet Banking. I can do this with my Aus bank, it is very easy (only a couple of clicks once the foreign account details are set up) and it gives you the option to send $AUD or Baht.

The only way a bank would be able to profit from sending baht is if they converted the AUD to baht in Aus and then sent the equivelant amount (which would be less) in AUD to the bank in Thailand. This wouldn't really be possible thou as transfers can take up to 2-7 days and the Aus bank could not guarantee the rate the thai bank would give on the particular day when the transfer arrived. Thai banks also charge a fee to receive foreign currency.

So why does is appear banks are so keen to do it?

[sonicdragon]

The easiest way to get around this in the future is to set up International Money Transfer on Internet Banking. I can do this with my Aus bank, it is very easy (only a couple of clicks once the foreign account details are set up) and it gives you the option to send $AUD or Baht.

The only way a bank would be able to profit from sending baht is if they converted the AUD to baht in Aus and then sent the equivelant amount (which would be less) in AUD to the bank in Thailand. This wouldn't really be possible thou as transfers can take up to 2-7 days and the Aus bank could not guarantee the rate the thai bank would give on the particular day when the transfer arrived. Thai banks also charge a fee to receive foreign currency.

So why does is appear banks are so keen to do it?

As I keep saying, the reason they do this is because they are making comissions on the foreign exchange transaction. Also, as bat69 just mentioned, many foreign banks will charge a fee for receiving foreign currency and in countries where there is no large onshore/offshore rates difference it would be better for the customer if the funds were transferred in the local currency of the receiving bank.

[Smithson]

What sort of commission would they be making? The Bangkok Bank charges more to receive Baht than to receive foreign currency.

Could I send Baht to the UK and if so what sort of rate would I get?

[sonicdragon]

That is hard to say. Could be as much as 1%.

As for sending baht to the UK, you can't do that - it is part of the reason why the offshore rate is higher.

[Maestro]

After rechecking with my brother he tells me he did the same thing 3 times when he went in the bank which was put his atm card under the window with a slip of paper containing all my details. He then told them he wanted to send $5000 or $3000 to that account in Thailand.

In this situation, the bank should clearly have remitted dollars to Thailand, not Baht. The bank is at fault.

--

Maestro

[Niloc]

I use the Bangkok bank and they do not charge any commission of any kind. The sending bank (WBC) charges me $20 irrespective of the amount but the maximum per day I can transfer is $5000.

[Smithson]

That is hard to say. Could be as much as 1%.

As for sending baht to the UK, you can't do that - it is part of the reason why the offshore rate is higher.

So the bank does the exchange themselves to gain the 1%, even though it's just cost the customer 10 - 15%. Not exactly doing their customers a favor.

As far as the bank being in the wrong, from my experience they won't take responsibility. My UK customers left RBS when they did it to him.

[samran]

After rechecking with my brother he tells me he did the same thing 3 times when he went in the bank which was put his atm card under the window with a slip of paper containing all my details. He then told them he wanted to send $5000 or $3000 to that account in Thailand.

In this situation, the bank should clearly have remitted dollars to Thailand, not Baht. The bank is at fault.

--

Maestro

While they are at fault, I dare say it would be highly unlikely for 'Sharon' the teller to know about the onshore/offshore rate, which in my experience is the reason why this confusion happens. If it hasn't been mentioned already, sonicdragon has produced this thread which we've made a sticky to help explain the situation:

http://www.thaivisa.com/forum/index.php?showtopic=127371

As I have said before, if it was possible for banks to get the preferential onshore rate to themselves, the differences between the onshore and offshore rates would have been bid away instantly.

If you've still got the transaction request for which explicitly states you wanted AUD sent, then you have a huge cause for recompensation.

[Smithson]

If you've still got the transaction request for which explicitly states you wanted AUD sent, then you have a huge cause for recompensation.

Don't you just write the amount you'd like on the form? Would this be considered 'explicitly stating'. In the case with my customer, the form had a box to tick, so they covered themselves. I'd also covered myself by explaining what to do, but it was a while ago and he forgot on his second payment.

[samran]

If you've still got the transaction request for which explicitly states you wanted AUD sent, then you have a huge cause for recompensation.

Don't you just write the amount you'd like on the form? Would this be considered 'explicitly stating'. In the case with my customer, the form had a box to tick, so they covered themselves. I'd also covered myself by explaining what to do, but it was a while ago and he forgot on his second payment.

You are probably corrrect, but when I've had to transfer money via a bank branch I've never had the option deciding how I wanted my money sent via ticking a box. I've always made a note in the comments section "SEND MONEY IN AUSTRALIAN DOLLARS TO THAILAND" and to allow the recipient bank to do the conversion.

The problem is, that the Aust bank probably just entered the offshore forex market, thinking that it would not be substantially different to the rate you'd get in Thailand. I guess, with most other currencies, this is probably the case, which is why I wouldn't expect the plonker behind the desk in a suburban branch to know about the Thai baht onshore/offshore rate.

As I said though (and I realise the OP is having difficulty with the customer service in the bank), but he needs to get in touch with someone who knows a modicum about Asian currency markets and say to them "look, I asked for Aussie dollars to be wired and converted in Thailand. You've converted the Aussie dollars and then wired them, which has left me worse off and which is contrary to my instructions. Here are the instructions I've given, which weren't carried out". He'll probably have to explain to whoever that there are two markets for baht, and they bought baht in the incorrect market (ie the offshore one).

I do sympathise, it sounds like he is dealing with people who don't really know their jobs (at least when it comes to this particular issue).

[Smithson]

I've had the problem a couple of times with customers, most banks will send local currency over here for conversion, but some choose to convert themselves. When customers have been stung, complaining to the bank does nothing.

[siam-i-am]

It seems there is no point debating this issue.

PCA is convinced it is a scam (because it fits his victimised worldview) and while many members are methodically trying to explain that it is, in fact, something very different, he replies with a huff: "You believe what you want, I can't be bothered to explain it."

So, there we are. Thaivisa debate at its best.

The bank offered $500 back, not because they did anything wrong?

So, there we are. Thai visa reasoning at its best.