Stay Out Of Trouble When Sending Money Abroad
If you need to transfer money abroad there are lots of different ways to do it and a whole range of things to look out for to make sure you send it safely and get the best value for your transaction.
Why Send Money Abroad?
You may want to send money overseas regularly, perhaps to a member of your family who lives abroad. You may just need to send a one-off amount to help out someone in an emergency or you might need to transfer a large sum of money, for example if you are making a big purchase such as a property.
Whatever the reason, you should look into the best way to get the money into the hands of who it is intended for securely. Money transfer is often a target for scams, so be extra careful to choose a legitimate provider.
How to Send Money Abroad Safely
One method of sending cash overseas is to use a money-transfer company. The recipient doesn't even need to have a bank account and the transaction can be done over the internet, on the telephone or at a high-street store.
However, these types of businesses aren't covered by the Financial Services Compensation Scheme, so you're not guaranteed to receive full compensation if something goes wrong.
Companies trading more than three million euros a month have to be authorised by the Financial Services Authority, which means your cash is kept separately from the company accounts. That means it should be protected and paid back.
A 'Small Payments Institution' can just be registered but this means your money is not safeguarded and therefore not protected. If your money gets lost (but the firm hasn't gone bust), then the Financial Ombudsman Service will investigate your complaint and if it finds in your favour you should be able to get your money back.
Another tried and tested method is to use PayPal. As long as both parties have an email address, it's possible to move money into someone else's PayPal account almost instantly. The receiver can then transfer the money into their bank account to withdraw it.
High-street banks may also be worth considering and can offer peace of mind if you are nervous about sending money overseas. Some banks allow transfers to take place to linked banks abroad with no fee.
This is a good option if you are looking to send money regularly to a family member abroad as you can both agree to open compatible bank accounts. Check with your own bank and if they don't offer anything suitable then consider moving to a bank that does.
The Post Office has a fee-free transfer system that allows you to move between £250 and £300,000 overseas straight from your bank account, with no need to open a Post Office account.
Sam is a regular contributor to the financial-advice pages of a number of sites, including MoneySupermarket.