jgombos

Most forex brokers will claim wire transfers are free, but they'll make an arrangement with their bank where the bank grabs money as it funds or leaves the forex account. Customers don't know they've been scammed until after the money appears in their brokerage account, short of what was sent from a SEPA bank to a SEPA bank. The European financial system seems to have no defense against this scam.

Has anyone confirmed by way of experience any forex brokers that are not running this type of scam?

jgombos

I've documented the scam here ( http://money.wikia.com/wiki/Legal_scam:_Wire_Siphoning ).. coined the term wire siphoning. Hopefully this will increase public awareness.

hitchw

the broker i uses covers the cost of the transfers. ie, when i trade x amount and buy y amount of currency, the y amount is the total that i get into the account of my choice. the only time i have to pay a charge is when the trade is under £5K, then the recover the cost of the transfer (£10). apart from that i have never had any trouble? why do you ask? are you investing? if so where?

jgombos

That doesn't make much sense. Wire fees execute immediately, before you have a chance to place an order for a trade. When you fund your account, how could your broker know in advance whether you will trade £5K?

Or are you saying they charge you for the wire, and then later refund the wire expenses? What broker do you use?
I'm not interested in using FX for investing.. this is purely to exchange money.

hitchw

not sure if i get you...when you use a broker you have to say the amount that you want to exchange...regardless if its for investment or transfer of funds...you have to call up and say, i want to purchase this amount.(lets say gbp-eur)..if the total of pounds based on the rate is under 5k then they will recover the cost of the transfer from the transfer of the euros from their euro account to yours... if it is over 5k they will cover costs...i use rationalfx...always beat the rates other companies offer and quick service.

jgombos

RationalFX may indeed be a good deal. But I don't like all the marketing BS on their site, which hinders my ability to see the bottom line. You're saying the transfer fee is £10, and the site says it's free in one place, and in another part of the site it says the transfer fee is £25. There's no mention of how tight the spreads are, and whether these are realtime spotFX trades. They're hiding something.. it's a little dodgy.. I'll keep looking.

hitchw

know what you mean, but from experience they arent hiding anytthing. as with any company in any sector, they will obviously mention free transfers (ie on anything over 5k) but i cant see the bit that mentions the 25 quid charge? i think you mean on the chart?! pretty sure that that means for regular payments, other institutions would charge 25 etc...same as no receiving charges compared to .40...guy i use there always looks out for me couldnt reccommend him highly enough

scotia123

I hope I have bounced into the correct thread here......So I have asked this question before, but I wanted to see if anyone has been using another company who would give better exchange rates. Right now I have my pensions and house rental money transferred each month using XE Trade. I get on average around 2 to 2.5 cents per pound taken off the advertised exchange rate when I do my transfers. I do keep an eye on the exchange rates and try to time things when the pound is looking better. As this is quite new to me I wondered if anyone can give me any info on a better company with better rates to get my pounds transferred to the USA in dollars on a monthly basis.

jgombos

I've started a wiki in attempt to essentially answer your question:

http://money.wikia.com/wiki/Moving_Money

The problem is that there is no transparency in forex markets. There are transaction costs, as well as exchange costs, and all forex brokers will hide one of those costs, or both. The whole business thrives on deception.

To get a good exchange rate, you need to do what's called a "spot FX" trade. The difficulty is that the types of brokers that offer spot FX trading run the wire siphoning scam, or they only offer non-deliverable assets (meaning you cannot withdraw the currency you buy), and they never publish the fact that their assets are non-deliverable.

Effectively, we're in a maze without an exit; every broker I've studied has turned out to be a dead end.

scotia123

Thanks for the info it made interesting reading. I guess I will stick with XE right now, they seem to give the best xchange rate although it does take them a few days to get the money here.

hitchw

try rationalfx, pretty sure they will not take off that amount...also whenever I have done usd trades with them, they have got the money there same day. would be more than happy to give you my brokers details, really couldnt reccommend him enough...

PhilBen

I work for a fx company and can tell you in most cases this is not the case. quite often it's landing charges at the receiving bank. <<snip>>

PhilBen

If you think about it the banks most of the time charge a lot more. On regular payments any fx company has to make money, for example if you send over £250 every month with me you would get charged 3-4% off interbank and NO other charges. A bank would charge you about 5% plus charges etc and that works the same way with larger transactions. By the way I cant promote my website as I would be breaking forums rules.

jgombos

There are credit cards and ATM cards that don't markup the interbank rate ( http://flyerguide.com/wiki/index.php...reign_Exchange ), and some of them don't have a transaction fee either.

The only reason FX markets are a rip off is because of all the non-competitive middlemen involved. Charging clients a percentage instead of a flat rate is obviously rip-off because the effort in typing another zero onto their order is trivial. The overhead doesn't scale with the amount moving. In fact, your site even claims the inverse - that it's cheaper to exchange large amounts. Yet you're charging more as the amount goes up.

hitchw

from what i can see jgombos is anti fx brokers as he has never used them and cant quite understand how it works. regardless of how much you transfer, be it 2k or 200k, you will always get a better rate than the bank...regarding brokers being transparent, i have an agreement with my broker about how many pips off market he quotes me...i know where the market is and then i know what rate i will get, i dont think it gets alot more transparent than that...