Crown Currency Exchange has potentially let down as many as 13,000 customers. Yesterday, it was announced that the overseas firm had slipped into administration. The effect is that their customers will not receive the money they have pre-ordered, which, in total amounts to £20 million.
This situation came about despite there being serious worries about the companies’ health from over a year ago. Concerns were voiced by the Financial Services Authority but yet, for some reason the issues were overlooked and even the authorities failed to take action against the firm which is based in Cornwall.
Even though this situation has left thousands of people, hundreds of pounds short-in some cases, thousands-the government is unwilling to tighten the regulation of similar currency firms. This is exactly what insiders are saying caused the problem in the first place and understandably, customers are furious today that changes are not being made.
A Treasury spokeswoman comments on the situation:
“Crown Currency Exchange’s business model was exceptional-it involved taking forward exchange risks. It would not be appropriate to crack down on the vast majority of currency exchanges that do not take such risks.”
Tightening up such firms would involve taking appropriate precautions that would leave customers money safe, even in a worse case scenario, with a firm going bust. This could be as simple as enforcing an law that forces currency exchange firms to keep customer cash and business cash separate.
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