Foreign exchange company Eris FX have just won a landmark ASA ruling, banning the use of misleading and inaccurate currency converters on foreign exchange websites.
The converters are widely used by specialist currency providers on websites to overseas property buyers. They appear to show how much a potential cutover would be charged for the foreign currency, but in reality they only return the ‘interbank’ or market exchange rate; which is not an achievable rate for consumers.
In February Eris FX wrote to the FCA and then to the Advertising Standards Authority, who investigated one converter on World First Ltd’s website. They found that it contravened the CAP code on advertising on four counts, and the ruling will now be used as a precedent for the whole sector.
Ex-city trader and founder of Eris FX, Helen Scott, says:
“We are trying to operate an ethical and responsible currency exchange and payments business against a backdrop of industry-wide breaches of regulations and misleading advertising practices that the regulators are turning a blind eye to.
“This will end a misleading practice that has potentially cost British consumers millions of pounds over recent years because they don’t understand the difference between a customer rate which includes the brokers fee, and the market rate which doesn’t. On a substantial trade this difference could be thousands of pounds.”
Eris FX are a Yorkshire-based currency exchange company who use their own custom-made software to run a fair and ethical foreign exchange website. They are currently the first and only currency specialist to show live customer rates, updated every second, which include their fees.
Eris FX are currently seeking a round of investment on crowdfunding platform Seedrs. The company are looking for £750,000, in return for 10.35 percent equity. When asked why Eris FX chose crowdfunding, rather than more traditional methods of financing, Scott said:
“We believe it is a quicker route than VC funding, which can often take many months. We also fall between the cracks in the amount we are looking to raise – most fintech VC’s are looking to invest several million pounds but we are looking for less than that.
“Having said that, the crowdfunding experience is not proving an easy one – we think that the investors there are probably more geared towards understanding product offerings, rather than fintech services.”
Eris FX are another example of British start-up companies leading the way in the fintech sector, and choosing crowdfunding to do so. For more information on how to invest in Eris FX, visit their campaign page on Seedrs.
Miranda Wadham on 16/10/2015
