Warning - double bank charges on money transfers

[AhFarangJa]

I thought I would post this in case some members are unaware of a sudden change in a certain banks fee policy. For many years I have been sending money from Jersey to Thailand. I have always been charged a £20 fee from my bank, then the Thai bank would charge about 250 Baht, no problem.

On checking last months statements I found an extra £20 charge called 'Correspondent Bank Charges'

My bank informed me it was a charge levied by the Thai bank, so now I am suddenly paying double what I used to.

I wondered if anyone else has had a similar experience.

I have not named the bank in case it breaks any rules, but it is named after a very big city on the Chao Phrya river.

[Stradavarius37]

There is more than one big city along the Chao Phrya with a bank named after it....lol

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[krisb]

Change bank?

[AhFarangJa]

Change bank?

That occured to me too. I will investigate when I return in August. just wanted to see if it is happening anywhere else.

[AhFarangJa]

There is more than one big city along the Chao Phrya with a bank named after it....lol

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Begins with a B !

[Sheryl]

Moved to banking and finance.

[lopburi3]

Correspondent bank charge would have been made in UK rather than Thailand and is the route your home bank uses to transfer the funds. The charge in Thailand is only a fee of between 200-500 baht for the exchange service based on a fee of 1/4% on foreign remitted currency. Are you sure funds were not converted to baht prior to sending to Thailand in this case? Suspect that may be the reason for large additional change. Thailand would not be charging a fee in pounds.

[AhFarangJa]

Correspondent bank charge would have been made in UK rather than Thailand and is the route your home bank uses to transfer the funds. The charge in Thailand is only a fee of between 200-500 baht for the exchange service based on a fee of 1/4% on foreign remitted currency. Are you sure funds were not converted to baht prior to sending to Thailand in this case? Suspect that may be the reason for large additional change. Thailand would not be charging a fee in pounds.

My bank called me yesterday after I e-mailed them. Money was sent in Pounds Sterling. I agree with what you say that a Thai bank would not be charging Sterling, but my bank insisted it was a charge levied by the Thai bank.

[Beetlejuice]

Regarding the bank the OP is referring to, I use telephone banking with one of my UK banks and was asked whether I would prefer to pay the bank money transfer fee to my UK bank or with my Bangkok Bank account here in Thailand. I chose to pay the fee to my UK bank and was only changed something like 250 baht at the Bangkok Bank and this was only 3 weeks ago.

Unless this has changed during the last 3 weeks or the OP did not use the standard money transfer system I do not know, but I advise the OP to return back to his bank and query these charges again.

[tim armstrong]

Lopburi3 has nailed it. I only discovered in the last year much to my shock, the difference between having money transferred in the original currency or transferring it in baht. It does indeed make a difference. I would also watch for a fee from the clearing bank in Bangkok, and a second fee when they send it to your local branch or bank

[claffey]

Just use western union..

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[lopburi3]

Have you checked the exchange rate for Western Union? Not very good I suspect.

[Beetlejuice]

Correspondent bank charge would have been made in UK rather than Thailand and is the route your home bank uses to transfer the funds. The charge in Thailand is only a fee of between 200-500 baht for the exchange service based on a fee of 1/4% on foreign remitted currency. Are you sure funds were not converted to baht prior to sending to Thailand in this case? Suspect that may be the reason for large additional change. Thailand would not be charging a fee in pounds.

I have always had my money transferred in currency of my home country and never in bahts. What you have mentioned I did not know and thank you for bringing this to our attention, very informative and useful indeed.

[Pib]

My bank called me yesterday after I e-mailed them. Money was sent in Pounds Sterling. I agree with what you say that a Thai bank would not be charging Sterling, but my bank insisted it was a charge levied by the Thai bank.

Nope, the correspondent bank (a.k.a., intermediary bank) is a middleman bank "your Sending bank must use" to accomplish the international transfer. Some Sending banks must use a correspondent bank; others don't as they have in-house capability to complete the transfer all the way to the intended receiving bank. Now I've seen a few posts where apparently the correspondent bank was another Thai bank who received the funds, they sliced off their middle man fee, and they completed the transfer to your intended receiving bank. But almost always the correspondent bank is outside of Thailand somewhere/usually right in your home country just as your Sending bank.

And you are running up against what many TV posters have written over the years about where the Sending bank seems to be clueless about their correspondent bank fee...and may not even know a correspondent bank is being used...instead they assume the receiving bank applied the fee you are complaining about. Or worst yet, they are intentionally playing dumb about use of any correspondent bank and blame the fee on the receiving bank...I expect this kind of respond works on many of their customers.

Thai banks get blamed for a lot of international transfer fees when in fact it was Sending or Correspondent bank fees. The typical Thai bank currency conversion/receipt fee, whether the funds arrive in a foreign currency or already converted to baht, is 0.25% (Bt200 min, Bt500 max)...any other fees are Sending and Correspondent bank fees. And as mentioned, the Correspondent bank is nothing more than a middleman the Sending bank is using to help accomplish the transfer.

Now if your Sending bank can not give you the name of their correspondent bank/can't tell you the exact fee then place them in the clueless category....or worst yet, intentionally telling your a lie. Durn banksters!!!

[GeorgeO]

I, on the other hand, have just experienced a significant reduction in bank charges for transfers from the UK to Thailand.

For transferring funds from HSBC (UK) to Bangkok Bank, the sending bank (HSBC) used to charge me £17.00, but I believe the Ombudsman has been applying pressure to the UK banks, so this was recently reduced to just £4.00. Yes, £4.00, even if I am transferring £10,000 ... difficult to believe I know.

Furthermore, Bangkok Bank do not levy any charge for receiving the funds. I always ensure that the funds are transferred in Sterling, as I find I get a much better exchange rate at the receiving bank than if I were to accept the sending bank exchange rate.

[Suradit69]

I send from my bank in US dollars. Pay $10 in New York and usually about Baht 200 in Thailand.

I agree with Pib:

Nope, the correspondent bank (a.k.a., intermediary bank) is a middleman bank "your Sending bank must use" to accomplish the international transfer. Some Sending banks must use a correspondent bank; others don't as they have in-house capability to complete the transfer all the way to the intended receiving bank.

If your foreign bank has to use another bank with the facilities to handle the transfer, that (generally larger) bank is the correspondent bank. It seems like your home bank shouldn't charge you twice for an international transfer if they're shifting your money to another domestic bank first.

It's almost always best to make the transfer in foreign currency terms when it comes to bank charges, rates and if you need a record of foreign originated deposits in your Thai bank account to impress Immigrations for whatever reason. Don't let your home bank transfer baht to Thailand.

Edited June 7, 2014 by Suradit69

[realenglish1]

Oh I know Nam Twam Bank Or in English Flood Bank

[Maejo Man]

I, on the other hand, have just experienced a significant reduction in bank charges for transfers from the UK to Thailand.

For transferring funds from HSBC (UK) to Bangkok Bank, the sending bank (HSBC) used to charge me £17.00, but I believe the Ombudsman has been applying pressure to the UK banks, so this was recently reduced to just £4.00. Yes, £4.00, even if I am transferring £10,000 ... difficult to believe I know.

Furthermore, Bangkok Bank do not levy any charge for receiving the funds. I always ensure that the funds are transferred in Sterling, as I find I get a much better exchange rate at the receiving bank than if I were to accept the sending bank exchange rate.

I have been transferring funds from overseas for years, and the only charge incured is the $24 I pay for the ET. Bangkok Bank in Bangkok have never charged me for recieving funds. I always transfer funds in the local currency and never converted to Thai baht.

[Searat7]

I send dollars from USA to fx account at Bangkok Bank very cheaply but my health insurance company in Paris reimburses me for claims in dollars to my fx account here but they use a correspondent bank in the middle.....the charge on that end was 11% on a $560 transfer....

[Naam]

Correspondent bank charge would have been made in UK rather than Thailand and is the route your home bank uses to transfer the funds. The charge in Thailand is only a fee of between 200-500 baht for the exchange service based on a fee of 1/4% on foreign remitted currency. Are you sure funds were not converted to baht prior to sending to Thailand in this case? Suspect that may be the reason for large additional change. Thailand would not be charging a fee in pounds.

My bank called me yesterday after I e-mailed them. Money was sent in Pounds Sterling. I agree with what you say that a Thai bank would not be charging Sterling, but my bank insisted it was a charge levied by the Thai bank.

your bank is lying!

[JacChang]

Pib is spot on, great information.

Gone are the days of guessing and games.

Transfers occur in 3 stages, very simple and clear.

1) The sending bank will take a charge usually 10-30$ or a percentage.

2) If there is foreign currency involved, it must go through the "middle bank", this charge is usually unknown but for everyone's reference it is usually 25$ and this depends on the amount that you sent. This middle bank usually is not related to either the sending or receiving bank, and every single bank usually go through this "middle bank", it will be designated by the country.

3) Last, the receiving bank will or will not take a charge for receiving the funds. Please read on.

For the "middle bank" which handles foreign currencies, I want to point out is that it is not directly related to the charge of foreign exchange only. Even if you transfer from your Bangkok Bank USD savings account to your Kasikornbank USD savings account (Both in Thailand), you will still have to go through the "middle bank" with the estimated 25$ fee. Middle banks are because of international banking laws, that forbids local banks from doing any transactions in foreign currencies. Only "middle banks" aka correspondent bank, are allowed to do so, so everything must pass through them.

**USEFUL TIP**

Personal advice, do not only look at the charges and compare them to make your decision. Bankers are sly. Some will even offer 0% charges, but guess what their exchange rate is? I literally have to open Excel and list 10 banks together, then taking their fees, and then their individual exchange rates. Generally speaking, the higher the fees, the better the exchange rate. The lower the fees, they earn back from the exchange rate. So do your math and research properly. Not all the banks are the same, the difference ranges from 500-1000baht+ if you care.

[wooloomooloo]

OP - what bank are you sending from in Jersey?

[Maestro]

Pib got it right. When the beneficiary's bank is not a correspondent bank of the remitting bank for the currency being remitted, the transaction passes through an intermediary bank and this bank deducts its own fee from the amount being remitted. Since the intermediary bank's fee seems to have been in GBP it is reasonable to assume that it is a British bank. Next time you are in Thailand, have your Thai bank print out the credit advice for this incoming remittance and you will see that your Thai bank received GBP 20 less than the amount you remitted. Then fax your UK bank or use its online messaging service, if available – do not phone – and ask them through which intermediary bank the remittance was made and what fee that bank deducted.

[NoshowJones]

There is more than one big city along the Chao Phrya with a bank named after it....lol

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Looks like I am going to get my money transfers from the UK paid into my other bank account. WAIT A MINUTE!!!! Won't all the other banks do the same now?

[Gsxrnz]

It all depends if the Paying Bank has a direct relationship with the Beneficiary Bank to clear or remit funds. A very simple explanation (although not technically accurate) of this is does each of those banks have an account with each other. If they do, they can exchange currencies easily and you pay the standard fee at your Paying Bank ($20-$30) and a small commission in Thailand by your Beneficiary Bank - say 0.25% or a flat fee.

If they do not have a direct relationship as explained above, there is a network of international banks that specialise in clearing FX and they maintain relationships with banks all over the world. This would be a Correspondent Bank, which your Paying Bank uses as an intermediary agaent, and yes they will take a fee/commission along the same lines as your Paying Bank.

Typically, the Correspondent Bank will be domiciled in the country of the origin of the funds, but not always.

Edited June 7, 2014 by Gsxrnz

[DoctorB]

I use the internet only arm of the Uk Co-operative Bank, Smile Bank, to transfer to TMB. Smile only accept transfers in GB Pounds, US Dollars or Euros so conversion takes place at this end.

Smile Bank have always charged £17 and the correspondent bank £13, £30 in total regardless of the size of the transfer.

If I send money to the GF at Kasikorn Bank the £13 does not get charged, so I too tend to agree with Pib.

[wooloomooloo]

While I await a response from the OP as to what bank he is remitting funds from in Jersey, allow me to give a short analogy.

I live in Bristol and require £100 transporting to London to be dropped to my friend George. My friend Dave is driving to Reading and I give him £10 to perform the task of taking the funds to Reading. Dave has a friend called John who can meet him in Reading and take the £100 the rest of the way to London and give to George. Hang on, I've made no arrangement to pay John to perform the task of taking the money from Reading to London. So, John, in his infinite wisdom decides to take £10 from the £100 to perform the service and why shouldn't he. He has performed a service just as Dave did. Dave arrives at George's house and gives him £90.

[wooloomooloo]

Typically, the Correspondent Bank will be domiciled in the country of the origin of the funds, but not always.

99.99% of the time the correspondent will not be domiciled in the same country as the origin of the funds.

Edited June 7, 2014 by wooloomooloo

[JacChang]

Correspondent bank charge would have been made in UK rather than Thailand and is the route your home bank uses to transfer the funds. The charge in Thailand is only a fee of between 200-500 baht for the exchange service based on a fee of 1/4% on foreign remitted currency. Are you sure funds were not converted to baht prior to sending to Thailand in this case? Suspect that may be the reason for large additional change. Thailand would not be charging a fee in pounds.

My bank called me yesterday after I e-mailed them. Money was sent in Pounds Sterling. I agree with what you say that a Thai bank would not be charging Sterling, but my bank insisted it was a charge levied by the Thai bank.

your bank is lying!

Most bank staff are uneducated in their systems.

For a simple chart.

Bank in US takes your money, cuts out the fee for themselves, sends the money to correspondent bank.

10,000 USD - 30USD = 9970USD

Correspondent bank receives the 9970USD and cuts their half of fee $25 and sends to local bank of your foreign country.

9970USD - 25USD = 9945USD

Thai Bank receives 9945USD and whatever it does from here is up to them.

For their defense, the US bank has no control or information after the money left their hands. All they can do is blame whoever receives the money after it left their hands. And the Thai bank will also defend themselves by saying, they only received 9945, who knows what happen to your stated 10,000USD.

Now the interesting part.

For example,

Bangkok Bank charges no fees for receiving, and the exchange rate they will buy your US dollar is 33.

You will get 9945USDx33= 328,185THB

Kasikornbank charges 0.25% (Which is the norm internationally) and the exchange rate is 33.15

9945USD - 24.87USD = 9920USD x 33.15 = 328,848THB

Another note I would like to add from experience.

Remember the credit card from abroad? When we use it in Thailand, it will ask us if we would like to charge it in local THB or USD. I hope most of us know by now, the wise choice is THB. Reason is, this "scam" will usually let us feel that if they charge through USD, there would be no foreign exchange involved so it should be cheaper and let us have a peace of mind how much exactly we will be charged. But this fools us because what really goes on behind the scene is, they exchange your USD into THB and then into USD again. You lose twice.

Paypal does this as well, advice for you guys. If you had to withdraw foreign currency into your foreign currency account, it may (IS) another scam. It would be less "charges/fees" for you if you withdrew your foreign currency from paypal directly into your local currency local bank account. If you withdraw foreign currency from paypal into your local foreign currency account, what really is happening may be that paypal sends you local currencies anyways and your bank has to change it to foreign again.

Less conversions = more money you get.

[Doc46]

Correspondent bank charge would have been made in UK rather than Thailand and is the route your home bank uses to transfer the funds. The charge in Thailand is only a fee of between 200-500 baht for the exchange service based on a fee of 1/4% on foreign remitted currency. Are you sure funds were not converted to baht prior to sending to Thailand in this case? Suspect that may be the reason for large additional change. Thailand would not be charging a fee in pounds.

Wrong,,since June last year I got an extra charge of $35 AUD on my statement from my bank in AUS on top of their $22 AU I asked them and they said ,,Its your bank in Thailand fee gone up.