Exchange rate applied at time of processing transfer

Categories:
Telegraphic transfers
Summary:
Hana lived in Australia and wanted to take advantage of the favourable exchange rate at the time and transfer funds from a New Zealand bank account to an Australian one. She phoned the bank, but was told transfers could be done only at a branch or via internet banking. The latter could be done in one of two ways: either by completing an online telegraphic transfer request form or by sending a secure message to the bank’s email team.

Hana completed the online request form, but this was unsuccessful because the amount exceeded the limit. After sending a secure message, the bank contacted her to ask whether she wanted the funds sent in Australian or New Zealand dollars. The exchange rate had dropped since her initial call, and she asked what the rate would be if the funds were sent in Australian dollars. She was told the bank would have to get a special exchange rate from its treasury department because of the amount involved. The bank called back with the department's indicative rate. Hana confirmed she would like to exchange the funds at that rate, and was warned the rate could be different when processed.  

In fact, the rate dropped further when the transfer was eventually processed. Hana felt disadvantaged because the bank had not completed the transfer during her first call and wanted to be reimbursed for the difference. The bank wouldn’t do that, but offered to reimburse the difference between its treasury department rate and the actual rate.  

Our investigation

Hana complained to us. We looked at the bank’s telegraphic transfer policy. It confirmed Hana had received accurate information about what was required for the bank to undertake a transfer. This meant she would never have been able to complete the transfer during her initial call.  

We could not hold the bank responsible for the difference between the treasury department quote and the actual exchange rate because the bank’s terms and conditions made it clear it used the rate applicable at the time of processing the transfer, not the time of requesting the transfer. The bank staff member had also advised Hana it could change. 

Outcome

Hana accepted the bank’s offer. 

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