Hidden charges on Lloyds bank currency exchanges revealed – time to go P2P

By on May 10th, 2016 in Editorial

This will come as a huge shock to anyone who, over the last decade, has come to see large banks as paragons of virtue, whose dedication to providing the best value services to all of their clients – regardless of size, wealth or apparent sophistication – is beyond reproach. So it will come as a shock to precisely no one.

But there’s a distinctly unpleasant whiff of exploitative opportunism here. Lloyds’ guidance to its foreign exchange traders allows imposing an “Added Value” (AV) charge of up to 1.5% per trade “on a discretionary basis… taking into account the services and intellectual capital afforded to the client.” It’s hard to read this in any other way than Lloyds directing their staff to overcharge small or medium sized businesses that lack the clout or cynicism to question them.

Meanwhile, “in highly competitive markets, where clients are sophisticated… AV may not be charged.” At all! It’s safe to assume that “sophisticated” does not allude to an affinity for jazz, fish knives or cummerbunds, but is a euphemism for businesses that have the means and connections to merit preferential treatment. Once again, those who can best afford to pay are permitted to pay nothing.

“Experts believe the hidden fees to be standard practice among big banks”

Small and medium-sized business owners are understandably outraged, having trustingly assumed that they were getting the best rates while being kept in the dark by their bank. Experts believe the hidden fees to be standard practice among big banks. Small business minister Anna Soubry has called for more transparency and told the Sunday Times: “I want to know how we can make sure we do things fairly and make sure small businesses are not disadvantaged. I look forward to an explanation.” Let’s hope she shares any explanation from Lloyds with the public.

Is it really too much to ask that smaller clients be subject to the same respect and terms as their more well-established competitors? No. It isn’t. From our very first trade, we have prided ourselves on being completely transparent about our fees, which – at a flat rate of 0.2% for every customer, on every exchange, of any size – could have constituted an astonishing saving of up to 87% on costs for many of those unfortunate enough to have made their FX transactions through Lloyds.

By carrying out our currency transactions using P2P technology that allows unique scheduled exchanges to be carried out at the mid-market rate – directly between clients – we have effectively cut banks and brokers out of FX transactions, and with them the hidden fees that could be holding your business back.

We are disrupting the status quo, and – based on these revelations – not a moment too soon.


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James is freemarket’s Chief Commercial Officer. He has a history of finding new ways to solve age-old financial challenges and was responsible for launching some of the first online money transfer and prepaid card initiatives in Europe.


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