Which are the top 5 most hated companies in the money transfer domain? Which companies have been on the receiving end of most criticism towards their offering or service? Which companies have been used for fraud? Which ones were called to be investigated?

After years of covering foreign exchange, these are the most shocking cases we have encountered when it comes to accusations in regards to money transfer providers and currency brokers:

1. Dahabshiil

Dahabshiil, which has the weirdest name in the money transfer industry (supposedly pronounced like this) is a company that has suffered a ton of criticism throughout the years.

Here are a few of the fiascoes that have evolved this company:

1. A Dahabshiil employee was arrested and kept in Guantanamo for alleged terror funding through the company. (2009)
2. Ever since Mr. Ahmed Mohamed Mohamoud “Silanyo” has been chosen as the president of Somaliland there have been strong accusations of him doing everything in his power to “give” Dahabshiil the control of private banking in the country. The newly elected president was quick to appoint Mr. Ali H. Hassan, who is Dahabshiil’s founder cousin, as the chief of cabinet, as well as appoint Dr. Sa’ad Haji Ali Shireh, the former manager of Dahabshiil as a minister. (2010)
3. Then, the firm has tried to address independent newsgroups and threaten them to remove any negative information about them. (2010)
4. In addition to that, the PR firm that was hired by Dahabshiil was accused of editing Wikipedia pages to clean Dahabshiil’s reputation. This led to an unprecedented attack on Wikipedia’s behalf. (2011)
5. Dahabshiil’s UK bank accounts were shut down in 2013, but in that case, the criticism was mainly directed at Barclay’s bank and the strict regulation. (2013)
6. Most recently, the firm was sued by the son of political activist and singer Saado Ali Warsame, who led the resistance to Dahabshiil and their services. Al Warsame’s son has accused Dahabshiil not only of funding Al Shabaab, the group responsible for assassinating Saado Ali Warsame, but also of putting a bounty on her head and actively seeking her death. Somali communities worldwide have shown support for this lawsuit. (2015)

This is the song by Saado Ali Warsame against the Dahabshiil firm; according to her son’s lawsuit from 2015, her open criticism against the company led to her death.

2. Western Union

Western Union is notorious for three things: their sheer size as the world’s number 1 remittances company, their high fees (especially to developing regions), and the scams associated with their product.

To attest to the way this company is viewed, please see the following examples:

1. In 2007, 158 different groups united to boycott the firm for its high/unfair fees.
2. In 2014, Kofi Annan, the former UN secretary called to investigate the fees charged by companies like Western Union and MoneyGram.
3. In 2014, the Overseas Development Institute called on the Financial Conduct Authority to check the excessive fees charged by the firm.

And this is merely a small selection of the criticism this company has faced throughout its 100 years of existence. Mainly over the past few years, the topic of remittances to developing countries has been getting a lot of media and government attention. (After all, in its early years, Western Union wasn’t even transferring money but rather printing telegraphs).

Another main issue the company has been associated with is scams using its products. Because recipients’ identity remains anonymous in cash transfers, and of course because of its sheer size, scammers worldwide can easily use this service to receive payments.

To attest to the danger embedded in their cash transfer service, the largest retailers in the world issued warnings about the topic alongside the most significant financial institutions:

1. Federal Bank of NY’s warning
2. FTC’s warning
3. Amazon’s warning
4. eHow’s warning regarding eBay
5. … And Western Union writes about this topic extensively on their website.

Most recently, CBC reported that a scam was executed with the involvement of “legitimate” Western Union agents. Not only is the service problematic and often used for scams, but this time certified agents were also suspected of aiding scammers. Western Union has also been fined 1.75m Euro for not complying with money laundering regulations.

3. Crown Currency Exchange

Crown Currency exchange was a medium-sized money transfer firm from Penzance, UK that collapsed, leaving debts to 13,000 of their customers valued at around GBP 3m. The company’s directors are currently being tried for fraud and false accounting. Only the company’s directors were arrested, and they have completed the sale of their other company TorFX to the confident hands of Currencies Direct (it should be noted that even though Crown Currency and TorFX shared offices and had joint ownership of a few parties, they are nowadays not related in any way).

It is suspected that Crown Currency was only a part of a bigger scheme that included cash-for-gold companies, and that the Benstead  family (who were directors and employees of Crown Currency and several other financial services firms) allegedly burnt down documents relating to several of these companies before the investigating authorities could scrutinize them.

This whole story ended with a bigger tragedy when the man facing most allegations on trial, Peter Benstead, killed himself during the trial. Some of the directors were convicted of several counts, mainly around false accounting, while others were deemed not guilty.

4. PayPal

PayPal, one of the most recognized names in digital payments, has also faced significant criticism and controversy, particularly in its role as a money transfer service. The company has been accused of freezing customer accounts without warning, often holding large sums of money for extended periods.

Examples of the backlash PayPal has faced include:

1. In 2021, PayPal was accused of unfairly freezing the accounts of various small businesses and non-profits, leading to widespread complaints and lawsuits.
2. In 2022, PayPal faced significant criticism for allegedly censoring accounts associated with political activism, leading to concerns about the platform’s power to control financial access based on ideological lines.
3. There have been numerous instances where PayPal was accused of inadequate customer support, especially in cases involving fraudulent transactions or account suspensions.

These controversies have led to increasing scrutiny of PayPal’s practices, especially as more people rely on digital platforms for international money transfers.

5. TransferWise (now Wise)

TransferWise, rebranded as Wise, has been praised for its low fees and transparent pricing model. However, it hasn’t been free from controversy, particularly as it has grown to become one of the major players in the money transfer industry.

Controversies include:

1. In 2020, Wise faced criticism for failing to adequately protect customer data, leading to several high-profile data breaches. Customers expressed frustration over the company’s handling of these incidents and the lack of transparency regarding the breaches.
2. Wise has also been accused of discriminating against customers from certain countries, particularly those from nations with weaker currencies, by offering them unfavorable exchange rates compared to others.
3. There have been reports of Wise accounts being suddenly frozen or transactions delayed, causing significant inconvenience for users, particularly businesses that rely on the platform for international payments.

Despite these issues, Wise remains a popular choice for money transfers, although users are advised to remain vigilant and aware of potential risks.

Are there more controversies with foreign exchange than other industries?

There have been multiple controversies involving the foreign exchange industry. In them, we could see big players like major banks, remittance leaders, and massive investment firms, alongside smaller players like commercial companies, show a variety of malpractices towards clients. The information we provide here is not meant to discourage people from transferring money abroad – on the contrary, it demonstrates that every sector has its faults, and to stay safe, it’s not enough to work with a household name. Also, it’s clear that moving cash abroad is not really an option as there are so many limitations to it.