On 30 November 2023, we decided that 3 firms offering international money remittance services had breached competition law. We found that these 3 money transfer firms coordinated on certain exchange rates and certain transaction fees between 18 February 2017 and 31 May 2017 and so fixed prices charged to consumers in Glasgow looking to send money to Pakistan. We fined the firms a combined total of over £150,000.
The below case study summarises the FCA’s decision and provides some key lessons aimed at helping firms and relevant employees to comply with competition law.
Case study: International money remittance
Consumers and businesses can transfer money abroad using international money remittance. Consumers often use this service to transfer money to family and friends who live overseas.
During the period relevant to our decision, the 3 firms were involved in providing international money remittance to consumers in Glasgow who wanted to transfer money to Pakistan.
The FCA decided the following money transfer firms breached competition law:
What happened
On 15 February 2017, Small World opened its first and only branch in Glasgow. Before this, Small World had operated in Glasgow through a network of money transfer agents only, many located near to Small World’s new directly managed branch.
Several Glasgow-based money transfer agents active in providing UK to Pakistan remittance services had formed a group called the ‘Glasgow Money Transfer Association’ or ‘GMTA’. Both Dollar East and Hafiz Bros were members of the GMTA and individuals working at Dollar East and Hafiz Bros were part of a WhatsApp group with other GMTA members which was created in January 2017.
Soon after Small World’s Glasgow branch opened, certain GMTA agents applied pressure on Small World to change its pricing at the new branch.
They thought Small World’s Glasgow branch was offering customers better prices (in the form of better exchange rates and lower transaction fees) than GMTA members were offering their customers for transferring money to Pakistan. Certain GMTA members threatened to boycott Small World (that is, stop distributing its remittance services in their capacity as money transfer agents) if Small World’s Glasgow branch continued its pricing policy.
Links: https://www.fca.org.uk/firms/case-study-competition-act-1998-decision