In June this year my wife and I transferred our life’s savings from Portugal to the UK via a currency exchange company called Premier FX Limited.
Unfortunately, before we could actually take the money out, we received an email informing us that Premier FX had ceased trading and is now in administration.
Premier FX held itself up as being a fully regulated company that would segregate customer’s funds in the safe haven of a UK bank, in this case Barclays.
Before using Premier FX we checked it out on the Financial Conduct Authority (FCA) website and confirmed, as it had said, it was indeed regulated by the FCA.
GD, Greater Manchester
Those owed money by Premier FX or with questions about the administration process can contact the administrator by emailing firstname.lastname@example.org, or calling Brooke Overton-Yorke on 020 7495 1100, or by writing to PKF Geoffrey Martin & Co, 1 Westferry Circus, Canary Wharf, London E14 4HD.
Currently, I understand, these administrators are going over all the 50 or so individual Barclays accounts the company had. E
ach, I understand, had between 60 to 100 transactions per day so it will take time to see what each transaction relates to. The administrator will be in touch with creditors as soon as it has more information.
Premier FX offered money transfer services mainly to expats in Portugal and Spain. Such money remittance services are not covered by the Financial Services Compensation Scheme (FSCS) although firms in this line of business have to be regulated by the FCA and appear on its register. They may also be authorised, as Premier FX was.
The FCA said: “Authorised firms must either segregate such money from the firm’s own money, or deposit it with an EEA-authorised credit institution if it continues to be held at the end of the next business day following receipt, or take out an insurance policy or comparable guarantee to cover such funds to reimburse customers on the happening of an insolvency event.”
Requirements for firms that are only registered are less stringent.
The FCA applied for insolvency when, following the death of the founder, this firm became unable to pay its debts as they fell due.
This serves as a perturbing reminder that not everything is covered by the FSCS or indeed completely protected by the FCA.
For more details on this, see fscs.org.uk and find the “what we protect” page. Or, if calling from the UK, ring 0800 678 1100, or from overseas 0044 20 7741 4100.
As you point out, how are ordinary people supposed to know that money lost in this way is not covered by the financial safety net? This is a complicated area and advice should be taken. Indeed I found the FSCS website confusing on the subject as to why this case was not eligible for its redress and indeed rather at odds with the FCA website’s explanation.
The FSCS website indicated it was to do with where the money was held rather than the type of business the firm was undertaking.
I pointed this out to FSCS. It agreed with me, apologised and changed the wording online. Not that it would have confused people before they had lost out in this instance, only afterwards.