Dollar East (International Travel & Money Transfer) Ltd

Release Date: 30th November 2023

To access the original FCA document, click here.

Summary

The Financial Conduct Authority (FCA) issued a final notice addressing Dollar East (International Travel & Money Transfer) Ltd, Hafiz Bros Travel & Money Transfer Limited, and LCC Trans-Sending Limited (trading as Small World) along with its parent company, Small World Financial Services Group Limited. These firms were fined for infringing the Chapter I prohibition of the Competition Act 1998. The infringement, which occurred between 18 February 2017 and 31 May 2017, involved coordinating pricing practices to reduce competition in the UK to Pakistan remittance corridor.

Key Findings:

1. Infringement: The firms coordinated to set the retail exchange rates and transaction fees for UK to Pakistan remittances.
2. Coordination: This coordination was facilitated through a WhatsApp group where daily exchange rates were shared, maintaining higher prices and reduced competition.
3. Internal Communication: Internal emails within Small World confirmed the strategy to align pricing with competitors to avoid losing business, despite initial resistance and concerns over forming a ‘cartel.’
4. Fines: The FCA imposed the following fines:
   • Dollar East: £3,600
   • Hafiz Bros: £11,200
   • Small World and its parent company: £139,500

Key Takeaways for Firms:

• Avoid Anti-Competitive Practices: Firms must refrain from agreements or practices that reduce competition. Coordination on pricing and fees among competitors is strictly prohibited.
• Compliance and Monitoring: Ensure robust compliance monitoring to detect and prevent anti-competitive behaviour. Internal audits and training can help in maintaining adherence to competition laws.
• Transparency: Maintain transparent pricing strategies independently set without influence or coordination with competitors.
• Regulatory Awareness: Stay updated on regulatory requirements and guidelines to avoid inadvertent violations.

Conclusion

The FCA’s action against these firms underscores the importance of competitive practices in the financial sector. By setting an example through these fines, the FCA reinforces the need for firms to engage in fair competition and maintain transparency in their pricing strategies. Other firms must learn from this case to avoid similar pitfalls and ensure their practices align with regulatory expectations.

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