H.M. TREASURY NEWS RELEASE

HM Treasury News Release

134/99 13 August 1999

BETTER DEAL FOR CREDIT TRANSFER CUSTOMERS

A better deal for consumers through improved customer information and compensation for service failures by banks and other service providers offering credit transfers to and from most European countries will follow new rules coming into force on Saturday 14 August. Personal consumers as well as small business customers trading there will benefit from higher delivery standards.

The rules provide for :

prohibition of double charging

clear information on how long a transfer will take, how much it will cost and the exchange rate to be used

return of funds, refund of charges and interest paid for failure to deliver

interest paid on a daily basis for delays.

Welcoming the new service standards, Economic Secretary Melanie Johnson said:

"This is good news for people who send or receive money from abroad. For the first time we have a uniform set of standards for Europe, to ensure that the public get a fair deal from cross-border credit transfer services.

"They will get clear information on delivery times and charges; an end to the abuse of double charging; and compensation if things go wrong. Banks and other service providers will have to meet these strict new service requirements or pay up. I am confident that they will play their part in ensuring the new standards benefit their customers."

NOTES FOR EDITORS

1. The Cross-Border Credit Transfers Regulations 1999 implement EC Directive 97/5/EC, which aims to improve standards of service when people transfer money abroad by credit transfer within the European Economic Area (EEA), ie the 15 EU member states, Norway, Iceland and Liechtenstein.

2. The Directive aims to ensure that banks and similar institutions transferring up to 50,000 euro (approx £32,500) between EEA member states meet the following requirements:

- transfers must be credited to the beneficiary's bank within six working days, unless the originator and the bank specifically agree another timescale;

- interest is paid by the originator's bank if the transfer takes longer than six working days or the agreed alternative timescale;

- all charges for the transfer will be paid by the originator, and none of the banks involved in the transfer should deduct charges from the money transferred, unless the originator has specifically indicated that charges should be borne by or shared with the beneficiary;

- if double-charging does occur, the originator's bank will have to reimburse the beneficiary or the originator any sum wrongly deducted, or the beneficiary bank will have to reimburse the excess fees to the beneficiary;

- if transfers fail to reach the beneficiary's bank, the originator must be reimbursed in full up to a ceiling of 12,500 euro (approx £8125), within 14 working days after the customer's request, with repayment of charges and fees, plus interest;

- customers must have information made available to them, before a transaction, on the time to be taken, the basis of commission or charges, exchange rate and redress procedures, plus, following a transaction, a reference allowing identification of a transfer and the total charges.

3. Although the Directive provides for refund of up to 12,500 euro in the event of complete service failure, refund of the full amount by UK providers is normally required under UK law, which is unaffected by the Directive. The new rules confirm existing legal rights and provide for the additional benefits to customers of refund of charges and interest.

4. Copies of the Regulations can be obtained from the Government Bookshop and other HMSO outlets: ref SI 1876/99, price £3.

5. Media enquiries should be addressed to Charles Keseru at the Treasury press office on 0171 270 5188.

6. If you have access to the Internet, you can find this news release and other Treasury information at www.hm-treasury.gov.uk