Martin Lewis’ MSE issues refund warning after money transfer firms collapses into administration – get your cash back
MARTIN Lewis’ team has issued a refund warning after a money transfer firm collapsed into administration.
Small World, which lets users send funds through its website, call centre, and in-person at over 275 outlets, has collapsed into administration.
These firms enable the movement of money across different geographical locations, often including international transfers.
It operated out of nine physical branches, all in London, and it served customers in around 275 outlets run by third parties, including corner shops, travel agents and tech repair stores.
However, the firm stopped trading on June 10, 2024 and is no longer receiving or processing new money transfers.
The firm appointed administrators at Grant Thornton on June 18, 2024.
However, Small World has been placed by court order into what’s called “special administration”.
Martin Lewis‘ team and MoneySavingExpert.com (MSE) said: “Special administration is a legal process available when payment and electronic money firms go under, with the purpose of ensuring the continuation of service and/or the return of funds to affected consumers.
“In this case, the focus is on returning funds.
“It’s unclear how many people have unsent funds they’re waiting to be reimbursed for, though we’ve seen reports from people sending money to relatives in countries such as the Philippines who are now missing vital cash.”
What are money transfer firms?
A MONEY transfer firm is a financial service provider that facilitates the transfer of funds from one individual or entity to another.
These firms enable the movement of money across different geographical locations, often including international transfers.
They can be used for various purposes, such as sending remittances to family members, paying for goods and services, or transferring funds between personal accounts.
They’re often used as an alternative to conventional bank transfers, as these can take longer and may include higher fees.
Money transfer firms typically offer several methods for transferring funds, including:
- Bank transfers: Direct transfers from one bank account to another.
- Online transfers: Transfers conducted over the internet using the firm’s website or mobile app.
- Cash transfers: Physical cash can be sent and received at the firm’s branch locations or through partner agents.
- Mobile wallets: Transfers to and from mobile wallet accounts, which can be accessed via mobile devices.
- Prepaid cards: Funds can be loaded onto prepaid cards that can be used like debit cards.
These firms may also provide additional services such as currency exchange, bill payments, and mobile top-ups.
Well-known examples of money transfer firms include Western Union, MoneyGram, PayPal, and TransferWise (now known as Wise).
Key considerations when choosing a money transfer firm include fees, exchange rates, transfer speed, and the convenience of the service for both the sender and the recipient.
Unfortunately, there’s no guarantee that your money will be safe if a money transfer firm goes bust while it’s holding it.
The MSE teams added: “You also can’t complain to the Financial Ombudsman Service (FOS), as it won’t investigate complaints about bust firms.
“This means your only avenues for redress are your card provider (if you paid on card) and the administrator.”
The MSE team has explained exactly what you should do if the person you’ve sent money to hasn’t received it.
CHARGEBACK
Chargeback is a consumer protection mechanism that allows individuals to request a refund from their bank or card issuer if they encounter issues with a purchase made using a credit or debit card.
While chargeback is not a legal right in the UK, it is part of the voluntary schemes run by card networks like Visa, Mastercard, and American Express, and is widely supported by banks and financial institutions.
The MSE team said: “Here, your bank will try to get your money back from Small World’s bank.
“It is a robust rule, which helps many people get their money back – and Mastercard and Visa have both confirmed they would consider this type of claim (Small World didn’t accept American Express).
“You typically have 120 days from the date of the transaction to submit a claim – so go quick.
“Usually, it’s just a phone call where you tell the card firm what happened and ask it to do a chargeback.”
Once you’ve spoken to your bank you’ll need to provide the full details of your transaction with Small World.
Some banks will ask you to fill out a claim form.
Others just take details of the transaction and start the claim for you.
There’s no specific timeframe when it comes to getting your money back.
Once you’ve applied for chargeback, it’s up to your card provider to contact the supplier’s bank to process the refund, which could take time.
The MSE team added: ” If you paid on a credit card, the Section 75 legal protection you normally get on purchases of more than £100 but less than £30,000 is unlikely to apply here because your card provider would probably have treated the Small World transaction as equivalent to a cash withdrawal, which isn’t covered.”
CASH REFUND
If you paid Small World in cash you may get a refund from the firm’s administrators.
Grant Thornton said it is “committed to returning customer funds as soon as possible”.
The MSE team added: “Unfortunately, it’s unclear when this will happen.
“Even when it does, Grant Thornton said some costs would be deducted as part of the administration process, so it’s unclear how much you’d get back.
“Grant Thornton adds that it will send regular updates to affected customers on its progress.
“In the meantime, it’s urging people to make sure all contact information and bank account details are up to date.”
To do this call Small World on 020 3198 0387, or log into your online account via the Small World app.
How to save when sending money abroad
THE most common reasons for making an international transfer include buying or selling property abroad, sending money to family or friends overseas and repatriating wages.
Whatever the reason though, it pays not to get complacent about how you send money abroad.
Despite people’s willingness to embrace lifestyle opportunities on a global scale, many of us are guilty of laziness when it comes to making overseas money transfers.
We often revert to our bank to make these transactions rather than trying to find a better deal.
High street banks offer a multifaceted range of services, meaning that when it comes to foreign exchange, they may not offer competitive exchange rates or provide their clients with expert guidance about market fluctuations.
Using a foreign exchange specialist can have a number of advantages over your bank.
You can find the best rates by visiting a price comparison site like MoneySuperMarket.
Visit www.moneysupermarket.com/international-money-transfer to find out more.