FCA fines three money transfer firms for breaking competition law

Dollar East (International Travel & Money Transfer) Ltd; Hafiz Bros Travel & Money Transfer Limited; and LCC Trans-Sending Limited (including its parent company, Small World Financial Services Group Limited), trading as Small World, have been fined a combined total of over £150,000 for breaching competition law.    

The FCA found that, between 18 February 2017 and 31 May 2017, the firms coordinated on certain exchange rates offered to customers in Glasgow for converting UK pounds into Pakistan Rupees, when transferring money to Pakistan.  

They were also found to have fixed the transaction fee charged to customers when making certain money transfers from the UK to Pakistan via Small World’s Services.   

This price fixing affected transfers made by customers at the Dollar East and Small World branches in Glasgow.   

The FCA found that Hafiz Bros, while not operating a branch serving customers in Glasgow, facilitated this conduct.   

Sheldon Mills, Executive Director of Consumers and Competition at the FCA, said:   

'Money transfer businesses are an important service relied upon by many communities up and down the country.  

'We saw evidence of these businesses operating as a cartel, working together to fix their prices and exchange rates on money transfers.  

'This behaviour can lead to customers being ripped off, and it erodes public trust. We take this extremely seriously and will use our competition powers to protect consumers across the UK.'

All three firms have admitted to the FCA that they broke competition law and, as a result, have received settlement discounts to reflect this.   

Separately, the FCA has also written to other money transfer firms in Glasgow to remind them of their obligations under competition law.

Notes to editors

1. The FCA has imposed the following fines:  

   a. Dollar East has been fined £3,600. 
   b. Hafiz Bros has been fined £11,200.
   c. Small World has been fined £139,500.

2. All three firms have admitted to the FCA that they broke competition law and have received settlement discounts to reflect resource savings to the FCA in bringing this investigation to an earlier conclusion.   

3. The FCA is determined to use its powers to ensure that local retail markets are competitive across the UK and therefore prioritised this investigation.  

4. The powers and processes (including publicity) that the FCA has and follows in relation to the Competition Act 1998 are separate and different from those followed in relation to the Financial Services and Markets Act 2000.   

5. Under FSMA, the FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this, it has 3 operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers. The FCA has also recently been given a secondary objective to facilitate the international competitiveness of the UK economy and its medium to long term growth.  

6. Money transfer firms allow consumers and businesses to transfer funds. Consumers may use international money remittance services for a variety of reasons, often to transfer money to family and friends who reside overseas.   

7. The Competition Act 1998 prohibits agreements, practices and conduct that may damage competition in the UK. The Chapter I prohibition covers anti-competitive agreements and concerted practices between businesses which have as their object or effect the prevention, restriction or distortion of competition within the UK.   

8. The anti-competitive coordination in this case related to those exchange rates that the firms could vary (so that they may have been worse for the customer than might otherwise have been the case), and to the relevant flat rate transaction fee that could have been charged on the relevant transactions (which may have been higher than it might have been absent the coordination).  

9. The FCA considers the anti-competitive conduct to have related to the provision of in-store services only (the use of cash or a payment card in-person rather than a remote payment). Any online services offered by the firms is not considered to have been subject to the anti-competitive conduct.  

10. Any business found to have infringed the Chapter I prohibition can be fined up to 10% of its annual worldwide group turnover. In calculating financial penalties, the FCA takes into account a number of factors including seriousness and duration of the infringement(s), turnover in the relevant market and any mitigating and/or aggravating factors.  

11. The FCA’s decision is addressed to the following firms: 

    a. Dollar East (International Travel & Money Transfer) Ltd; (Dollar East) 
    b. Hafiz Bros Travel & Money Transfer Limited; (Hafiz Bros)
    c. LCC Trans-Sending Limited (subsidiary), and Small World Financial Services Group Limited (parent), trading as Small World.  

12. The FCA has also taken separate action to warn a number of other money transfer firms based in Glasgow about the importance of ensuring that they comply with competition law.  

13. The FCA’s decision follows a statement of objections issued in January 2023 to Dollar East, Hafiz Bros and Small World. All three firms admitted that they broke competition law and have accepted that they will not appeal the FCA’s decision.  

14. The FCA will publish a non-confidential version of its decision under the Competition Act 1998 in due course.   

15. Find out more information about the FCA.