Home› Archived Forums› General Discussion

Currency Exchange Firm Collapses

divingbboydivingbboy Posts: 14,074
Forum Member
✭✭
in General Discussion #1
Feel very sorry for anyone caught up in this. Sadly, it would seem that most people affected are people who've saved up for holidays:

http://www.bbc.co.uk/news/business-11466272

I have to say, though, that from looking at the company's website, I can't imagine that I would have handed over my money to them in a million years. To be clear: I'm not suggesting that they were doing anything remotely dodgy, but the business model they seem to have employed looks to be inherently risky:

http://www.crowncurrencyexchange.com/content/us-dollars.php

Comments

  • [Deleted User][Deleted User] Posts: 4,725
    Forum Member
    ✭✭✭
    #2
    It's a shame people have ended up in this situation but I think it's one of the problems we're seeing with people going after the bargains without considering why they're getting it so cheap or such great deals.
  • tanstaafltanstaafl Posts: 22,196
    Forum Member
    ✭✭✭
    #3
    It allowed individuals and business customers to pre-order foreign exchange at a set price up to a year in advance, with amounts of between £300 and £10,000 available.

    As far as I can see anyone who used it was gambling on the firm's skill at currency speculation being excellent. A bit too chancy for my taste.
  • divingbboydivingbboy Posts: 14,074
    Forum Member
    ✭✭
    #4
    tanstaafl wrote: »
    It allowed individuals and business customers to pre-order foreign exchange at a set price up to a year in advance, with amounts of between £300 and £10,000 available.

    As far as I can see anyone who used it was gambling on the firm's skill at currency speculation being excellent. A bit too chancy for my taste.

    That was the red flag for me. Either the firm was offering exchange rates that were slightly lower than what they predicted they'd be able to purchase the currency for immediately prior to the date that they had to hand the currency over to the customer, or they were investing money over a longer term and using new customers' funds to pay out older customers' funds that were now due, predicting that the investments would make them a profit. Either way, there's an inherent risk of cash flow drying up.
  • divingbboydivingbboy Posts: 14,074
    Forum Member
    ✭✭
    #5
    Damn. The reporter on BBC Breakfast has just said that affected customers should not expect to receive any money back at all. Apparently, even customers that paid via credit card do not have the usual protection doesn't apply, apparently.
  • sickparrotsickparrot Posts: 664
    Forum Member
    ✭✭
    #6
    We've used them a few times in the past, but only for money required in a week or so, and found them to be efficient.But there's no way we would've used it for delivery 6 months down the line. They must have taken a huge hit a couple of years ago when the pound plummeted against the dollar and euro.
  • jsmith99jsmith99 Posts: 20,382
    Forum Member
    ✭✭✭
    #7
    Nice business they had...if rates go the right way they pocket the difference. If they go the wrong way, go into administration. After a while they'll buy the business back from the administrators for a pittance, with debts written off, and start again.

    For some reason, parliament has chosen to let directors like this off lightly, when they should be banned from being a director again till they've paid off their debts.
Sign In or Register to comment.