A Dublin 4 reader, Ms M travels regularly to Britain and has a sterling deposit account at the TSB bank to minimise exchange conversion costs. She never expected it would cost her money.
Last spring she became eligible for a small British pension, worth about £500 sterling and requested that the Department of Social Services arrange to have her pension sent directly to her TSB sterling account. The first payment represented arrears and amounted to £615.07 sterling. Fund transactions between countries are now mainly done via SWIFT, the international money transaction system. In this case, the TSB, which is not a clearing bank, only has a SWIFT address, not a SWIFT authorisation key. The DSS sent the funds to Bank of Ireland, which has an authorisation key and which processes thousands of TSB destined transactions each year.
Family Money understands that the DSS did not specifically instruct SWIFT that the sterling payment should not be converted to Irish pounds when it reached Bank of Ireland. The conversion took place and £650 Irish pounds was sent to the TSB which converted it back into sterling. This time £580.37 sterling was lodged into Ms M's account. Between the SWIFT charge and the currency conversions, our reader lost the equivalent of £26.70 sterling.
Once the charge was discovered she complained to the TSB, but was unhappy with the bank's explanation.
"Maybe I should let it go," she says. "I have already wasted much time and energy on what is, after all, a very small issue. But I feel angry at being overcharged for a service I neither required nor wanted and the TSB's attitude `that this was a mistake, but it wasn't our fault."'
The TSB insists it simply followed instructions to lodge the DSS funds into our reader's sterling account. To offset the error, it offered to pay her the Irish pound amount it received via Bank of Ireland plus the conversion charge. If this was unsatisfactory (it was) TSB suggested she contact the DSS to have the whole transaction recalled and re-issued.
Unfortunately Ms M was told by the DSS this would have to take place within six days of the original transaction. At no time, says Ms M, did TSB inform her that because it does not hold a SWIFT authorisation key that any sterling credits needed to be clearly `flagged' when it enters the SWIFT system to prevent the kind of mix-up that occurred in this case.
All future payments will be sent directly to our reader's sterling account, but she is still being charged for the error. A certain amount of surprise has been expressed by clearing bank sources that TSB allows customers to open foreign currency accounts when it is unable to process international transactions itself. The view is that a customer should not be out of pocket because of a mix-up that would have been avoided if the bank had been able to process the transaction itself.
Readers who have foreign currency accounts with banks or building societies should always check to make sure that no unnecessary conversions take place and that they are not being charged if it does inadvertently happen.
