A banks tale – Part I
Sep 3rd, 2008 by Peter
Recently we sent some money to Cs father and mother. We’ve done so a few times already, because they need the necessary doe to prepare passport and visa for their hopefully upcoming trip to visit us here in Denmark. For us the fees are peanuts, but for them, it’s a whole lot of money.
We have sent money before, but normally we mailed them by regular letters. This march, we tried transferring the cash between our bank, and theirs (the Industrial and Commercial Bank of China). It turned out to be no easier task to arrange, and in the end and not faster either. At least it is way more secure. I thought.
The last 2 transfers we made didn’t make it completely. Both of them were 100USD.
Here’s a brief explanation to how such transactions is supposed to work:
When you transfer money you can do it via PC bank (I did this). First you write name of the receiver, his bank account number, the receiving banks BIC/IBAN numbers and their name. This part can be hard to obtain from Denmark.
Then you have to note which way to pay the transferring fees. There are 3 options usable:
- OUR: Sender pays all fees
SHA: Fees are shared between sender and receiver
BEN: Receiver pays all fees (deducts them from the sent money)
I picked OUR, since all costs would be paid by us, and a clean 100USD would arrive and not 98.50 or 101.75 or similar. The tricky part is how these fees are distributed between the banks after you hit “done”. It goes like this:
- I pay 100USD to be sent. Also I pay a 15USD + 8USD fee for the transactions. Both fees are given to the Danish bank (so I spend 123USD all in all)
- My bank sends 100USD to the Chinese bank with a note to withdraw their fee from the Danish bank (the15USD).
- The 100USD goes straight to the receiver’s bank account.
This is how it’s supposed to be…..supposed.
Now – you’re probably thinking: how can this go wrong? It’s an internationally agreed way to transfer money? The rules are clear (even I understand them ok?).
So why is it that there is only 85USD transferred to my father-in-laws account? He tried asking, but the local branch insisted that only 85USD was received.
C called the bank’s main seat instead, but after a long talk, it ended up with *surprise and suspense*: nothing new.
The semi-stupid employee couldn’t see any details and never revealed whether they had actually received 100USD or only 85USD. She just talked and talked without saying anything. C asked for the details about the transaction, but was told that to see details, she would need the code for Cs father’s account. So C caved and asked me to check my transactions history again for clues. Maybe I had done something wrong since only 85USD arrived.
At first I couldn’t see what could go wrong. My transactions list showed this:
August 8th – 497,- DKR International transfer (100USD)
August 8th – 75,- DKR Transfer fee
August 8th – 40,- DKR Transfer fee
All deducted from my account the same day and within same minute.
After a while I suddenly realised that 75,- DKR equals about 15USD. Hmm?
I discussed the whole matter with C and we ended up in the typical discussion of me jumping into conclusions about China end Chinese ways of doing things. I had to agree that I may have been a bit fast concluding that the fault must have been in the Chinese bank, so promised to call my bank (www.lsb.dk) and make sure everything went as I suspected on the Danish side of the deal.
After telling my tale to the banker, she told me that she would advice me to use the SHA code in the future. Not only was it cheaper, but it would solve our problem.
The problem, she said, was that some banks outside Europe (*sigh* – those ignorant non-Europeans?), don’t bother retrieving their part of the fee from the sender’s bank, but instead, they just rip them directly from the sent amount (in our case the 100USD, which in this case leaves *taaadaaa*. 85 USD). So now it had suddenly turned to be a battle between the Danish and the Chinese bank’s statements. Us caught in the middle with no way of getting any evidence from the Chinese bank, while I could easily see the details and get help from the Danish bank.
After telling C what our Danish bank told me, she became a bit pissed, and decided to call the Chinese bank again to make them dig deeper. This time armed with the code to her fathers account.
Guess what: She got nothing. No further, nothing new, except more repressed rage and more doubt whether it may have been the Danish bank that made the mistake.
This morning I called my bank again, and asked them if they could verify that I had made no mistakes and that 100USD had actually left the bank to China. No need telling that I was told everything looked fine and the money had actually been sent according to the international agreements.
So here we are:
I’m 99,9% sure the Danish bank has transferred the money according to the international rules. Hell I actually did the work myself via PC bank, so the bank’s server has just done what I have asked it to. The employees even checked it out and found everything in order on their side twice. They also told me that they have had previous experiences with some banks outside doing their part wrong (they didn’t say lazy, but I heard it between the lines). The numbers lost fit that version too. In general Danish banks are supposed to be pretty reliable (except Roskilde Bank of course < — Danish insider humour).
The Chinese bank on the other hand, haven’t told us anything new, and can’t see any details. I also have experience with some Chinese bankers telling you “no – that can’t be done”, when they actually don’t know anything about it. It’s easier to keep a straight face and say it can’t be done, instead of checking it out. Poker faces can’t be lost, you know?
So, yes, I may be a bit biased, but with good reasons. I’ve had my run-ins with this Chinese bank? Who would you believe?
I PROMISE I will make a public statement saying sorry, if it turns out that the Danish bank or yours truly is the guilty party. I doubt you’ll live to see it though. My prediction is that we’ll never get to the bottom of this and the money is lost (unlike the Chinese bank’s face?).
It’s not about the money. We can afford to loose those and we can send more if Cs father need them. Now it has turned into a matter of trust and principle. C is upset and want to persue the case. I told her to drop it, consider the money lost and keep her sanity instead.
Could be worse: I could be Ben Ross
Look here too (Dare I mention that it’s the same bank we have trouble with in China?).
Stay tuned for part II unfolding while you read this.
I read your post and the experiences are pretty familiar despite the fact that I worked for several years for a Scandinavian commercial bank back at home (not with international transfers, though so I am not a specialist). Your banks advice to do “shared” international payments when the payment goes outside EU, is similar to what I have got. The payments to US or Canada seem to still be ok, but payments to the East will have often similar problems with you. One reason why this problem may appear, is that between your Danish bank and the bank in China, is another bank called correspondent bank. That is because often the Danish bank will not have an account in a foreign bank and will transfer the money to their correspondent bank in China, who then again sends the money to the the receivers bank. So the correspondent bank will take his fees from the Danish bank, but the receivers bank doesn’t bother going through another bank to get his fees, or that info does not even reach him. So the truth could be somewhere in the middle.
Having lived in Asia, I have to say banking was rather frustrating for me there, as I am used to simplicity and transparency of such services in Northern Europe.
I would still suggest to use shared payments as my personal experience with transfers to different countries has shown that at the end that is the cheapest (but probably not always).
Good luck figuring out the truth!
Hi Helen,
Thanks for popping by. Your story seems to match my best guesses. Unfortunately :-(
I’ll follow your’s and my bank’s advice in the future. Seems more secure, and truth be told, we’re getting nowhere with the Chinese bank anyway. So far my wife has given up. Won’t be surprised if she picks up the torch again, but for now it has completely drained her energy.
That can happen with the banks sometimes. It happened to me a couple of times, I don’t remember the banks, but I did it online as well (transferring between my own accounts in different countries) and payed the fee as sender, but then the same fee had to be payed twice as a receiver on the other end. It does piss you off, but this is something the banks should be working on.
In my experience Chinese bank workers are extremely meticulous and do everything by the book, so I wouldn’t blame the human factor, just the procedures. To avoid this in future, simply don’t pay the transfer fee as a sender, but rather include it in the amount sent which will be deducted when received.
What Chinese bank was that? Just wondering….
Hey Serge,
Thanks for your input. Seems everyone is confirming my suspicions about the faulty procedure.
The bank is the Industrial and Commercial Bank of China. That the one you had problems with too?
Thank you for stopping by.
I had my share of difficulties with the Chinese banking system and I really hate to go to the bank in China. It’s extremely inefficient and they couldn’t care less about the customers – or so it seems. People always seem to use the “China is a developing country” but it seems more like an excuse not to make any progress at all. What I hate the most is going there and see a big crowd of people waiting but only a few windows open – the rest of the employees busy on the mobiles.
Think my post hit as sore spot with you there Kim ;-)
Indeed it did :-)