Question 1

What is APP fraud and what measures are in place to prevent it?

Accepted Answer

What is APP (Authorised Push Payment) fraud?

APP Fraud is where individuals are victims of a scam due to fraudsters tricking them into sending money. Some examples (although not limited to) are as follows:

Impersonation scams where fraudsters pretend to be from your bank, a company you may have had interactions with in the past or the police.
Business Email Compromise scammers impersonate a company executive or supplier, sending an email that appears legitimate, instructing an employee to make a payment to a fraudulent account.
Purchase scams that trick you into paying for goods or services that are not brought to the point of completion.
Triangle scams where you may be asked to make a purchase for someone else, beware. This might be a triangle scam, where a scammer uses stolen payment info to buy goods and has you forward them. Secure your data, report the scam — and don’t make any transactions.
Investment scams is when criminals convince victims to ‘invest’ with promises of high or guaranteed returns. In 2023, investment scams comprised a quarter of all APP fraud losses, totalling £107.8 million.

Who is eligible for fraud reimbursement under the new rules?

The reimbursement requirement applies to individuals, micro-enterprises, and small charities, where an APP scam payment is made using Faster Payments or CHAPS in the UK and sent to a relevant account in the UK. To be eligible, you need to raise a claim as soon as you realise it’s a scam, but no later than 13 months of the final payment made to a fraudster as part of the same scam.

The rules require you to take caution when making payments — this is known as the Consumer Standard of Caution. Under the Consumer Standard of Caution, you should always remember to:

Report the fraud to Freemarket as soon as it happens.
Share all information necessary when reporting your claim to help the investigation.
Report the fraud to the police, or consent to Freemarket reporting on your behalf.
Have regard to specific, directed interventions made either by Freemarket, or by a competent national authority e.g. you should take note of any warnings made by Freemarket before you proceed with a payment.

Furthermore, as per clause 14.2 of the Freemarket terms and conditions, APP scams only apply to individuals, small charities and micro-enterprises and do not apply to companies deemed as corporates. Please ensure you are aware of the Terms and Conditions that have been agreed upon.

Every claim will be reviewed individually based on the information you provide as well as any information available from the receiving Payment Service Provider or the police.

How long will it take?

Any eligible APP claim must be reimbursed back within five business days of the victim reporting the scam. It may take longer under certain circumstances if we pause the five-business day reimbursement timescale. This can be done when Freemarket are liaising with yourselves and counterparties to ascertain the nature of the fraud and collect any relevant supporting documents. The timescale for deciding whether to reimburse is then moved to a maximum of 35 business days.

How much can be reimbursed?

The maximum reimbursement amount per claim is £85,000.

What measures have we taken to prevent APP Fraud?

Freemarket utilises best in class fraud detection measures and transaction monitoring to ensure we are playing our part in protecting you from fraud. Additionally, as per section 31 of your terms and conditions, Freemarket have implemented Confirmation of Payee to ensure better protection. Confirmation of Payee is an account name checking service designed to help reduce misdirected payments, and provides greater assurance that payments are being sent and collected from the intended account holder for UK domestic payments.

What can I do to avoid becoming a victim of APP Fraud?

To avoid becoming a victim of APP fraud, here are some effective measures you can take:

Verify Requests: Always double-check the identity of anyone requesting a payment. If you receive a request via email or phone, contact the person or company directly using official contact details,
Don’t rush: Scammers often create a sense of urgency. Take your time to think through the request and do not feel pressured to act immediately,
Be wary of unsolicited communications: If you receive unexpected messages or calls, especially those asking for personal information or payments, be cautious. Scammers often use tactics like impersonation,
Educate yourself: Stay informed about the latest scams and tactics used by fraudsters. Awareness is key to prevention. Keep up to date with Take Five for further advice,
Report suspicious activity: If you suspect you’ve been targeted or have fallen victim to a scam, report it to your local bank and local authorities immediately.

For more information on keeping safe online, please see our help article here.

Will I always be reimbursed?

You won’t get your money back if you’re found to have been complicit in the fraud or grossly negligent (i.e. ignoring clear warnings) or if you’re not an individual, micro-enterprise or small charity. Please note, this exception does not apply to vulnerable consumers.

Question 2

What is the Confirmation of Payee (CoP)?

Accepted Answer

Confirmation of Payee (CoP) is a name checking service for UK-based payment, introduced by the Payment Systems Regulator (PSR) which has now been successfully implemented by a number of UK banks, building societies and other payment service providers (PSPs). The aim of the service is to reduce certain types of fraud as well as misdirected payments and to give confidence in a transaction knowing it will go to the correct beneficiary.

Prior to this service being implemented, a payer would provide their PSP with all the payee's details, including their bank sort code and account number together with the name of the person or organisation they were intending to pay. The sort code and account number were then used to route the payment in accordance with the instructions given, however, there was no facility for the payer to check and confirm the name on the account being paid ahead of the payment being sent.

CoP is a way of giving payers greater assurance that their payments are being routed to the intended recipient and therefore are not being accidentally or deliberately misdirected.

A CoP check will be performed all new and existing beneficiaries where:

You are paying to an account you do not own
The account sort code resides in UK, Isle of Man, Jersey or Guernsey
There has been no CoP check performed against the beneficiary
The CoP check has expired (this happens after 12 months)

How does it work?

New beneficiary account details

You will be asked to add the new beneficiary bank account details on this screen.

new beneficiary

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/UiU6iPPdkI/new%20bene%20example.jpg (new bene example )

Existing beneficiary account details

new beneficiary

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/ODqplt0vxu/new%20bene%20example.jpg (new bene example (3).jpg)

Account details match

The account details provided match the details the corresponding bank has for the payee.

beneficiary match

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/62JdyGCmed/match%20.jpg (beneficiary match)

Close match

The details you have provided are a close match to the details held by the corresponding bank. We will provide you with the name on the account the bank has for you to decide to continue or not.

close match

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/gGQKaCaI7n/close%20match.jpg (close match)

No match

The details you have provided do not match with the details held by the corresponding bank. You have an option to continue or not.

no match

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/jRVTeDyMss/no%20match.jpg (no match)

Account type mismatch

The details you have provided do not match with the type of account at the corresponding bank. You have an option to continue or not.

account mismatch

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/4rOUBzCkDp/account%20type%20mismatch.jpg (account type mismatch (1).jpg)

Account not found

The account details do not match any real bank account. You will not be able to continue.

account not found

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/hee7iknIhl/account%20not%20found.jpg (account not found)

If you have any questions or issues with Confirmation of Payee please do not hesitate to contact our team via: support@wearefreemarket.com

Question 3

Do you have a glossary of commonly used terms?

Accepted Answer

At Freemarket, we try to keep things as straightforward as we can. However, if there are any terms that are unclear, we’ve compiled a glossary to help explain.

A

ABA routing transit number

American Bankers Association code originally used on US cheques now also used in Fedwire and US ACH payments.

Anti-Money Laundering (AML)

Checks set out by financial regulators to prevent proceeds from criminal activity being filtered through the banking system. Describes the legal controls that require financial institutions and other regulated entities to prevent, detect, and report money laundering activities. There are multiple layers of checks undertaken by Freemarket:

Client screening – onboarding checks (KYC and various levels of Diligence, depending on the risk of the client) to ensure client is bona fide. Details are refreshed periodically, at a frequency determined by the risk of the client.
Transaction screening – check the beneficiary and other aspects of the payment are bona fide before the payment is sent
Transaction Monitoring – perform checks of payments sent over a period to look for suspicious patterns (e.g. for “smurfing”)

Automated Clearing House (ACH)

A US-based organisation that processes massive amounts of debit and credit transactions such as direct deposit, payroll and vendor USD payments in the USA.

Application Programming Interface (API)

A way for two or more computer programs to communicate or interface with each other, intended to simplify the building of client-side software. It has been described as a “contract” between a client and server, such that if the client makes a request in a specific format, it will always get a response in a specific format or initiate a defined action. Clients use our API to communicate with our system to initiate some action like an exchange or to get details like transfers.

B

Basis points (bp)

Often used in relation to fees, charges and variable mark-ups on currency rates. Each basis point is 1/100th of 1% - for example, 50bp is half a percent i.e. 0.50%.

BBAN

Basic Bank Account Number. In the UK this is the 6 digit sort code + 8 digit account number.

BIC

A Business Identifier Code (BIC) is a unique code that tells the Swift network which bank is making/receiving messages, helping to process payments.

Bid rate

The bid rate is the rate quoted to you when you’re about to buy a currency.

C

Charge type

The type of deduction made by a receiving bank for a priority payment. There are two available payment charge types - ‘Shared’ (SHA) and ‘Ours’ (OUR).

SHA payments: the intermediary bank charges are deducted from the payment amount. As a result, the payment amount received in the beneficiary bank account may be less than the full amount expected.

OUR payments: the intermediary bank charges are covered by the payer and not deducted from the payment amount. The beneficiary receives the full payment amount but the payer will be charged a higher payment fee to cover the intermediary bank charges.

Clearing

The process of confirming, documenting and settling a transaction as well as managing credit and collateral exposures and supporting monitoring and reporting processes. These processes are handled by a clearing house as they require a single, central, trusted entity which can trade with all its members on terms that enable certainty and consistency.

Correspondent bank

Banks are financial institutions that are licensed to provide financial services, such as deposit taking, lending, currency exchange and payment services.A correspondent bank is a bank in one country that is authorized to provide services for another bank or financial institution in a foreign country.

Cross-border payment

Cross-border payment is a term referring to transactions involving individuals, companies, or banks operating in at least two different countries.

Counter-terrorist financing

A multitude of laws and regulations have been enacted to reign in the financing of terrorist activity, and are collectively known as counter-terrorist financing policy. Under these policies, most financial institutions are required to fulfil many strict requirements regarding monitoring customers’ transactions and behaviour, conducting proper due diligence, and maintaining appropriate records.

Currencies

Currencies are a system of money accepted within a country, for example the Pound Sterling in the UK, or the Euro across the Eurozone.

Currency pairs

A currency pair is a quotation featuring two different currencies, with currency being quoted in terms of the other.

D

Delivery date

The delivery date is the date on which the purchased funds are available for payment.

Direct and cover

Non-serial payment messaging where the initiating bank sends a payment message directly to the beneficiary bank (MT103), and sends funds to cover the payment (MT202COV) on an FI-to-FI basis.

E

Enhanced due diligence

A KYC process that provides a greater level of scrutiny of potential business partnerships and highlights risk that cannot be detected by Customer Due Diligence.

Exchange rate

An exchange rate is the price of one country's currency expressed in another country's currency. An exchange rate has two components, the domestic currency and a foreign currency (see currency pairs), and can be quoted either directly or indirectly.

F

Faster Payments (FPS)

The UK's banking initiative for sending sterling payments electronically in the UK and reducing payment times between different domestic banks' customer GBP accounts. Generally, the receiver see the credit on the account within seconds and also be able to access the funds.

FinTS

FinTS (Financial Transaction Services) is a bank-independent protocol primarily used in Europe for online banking.

Foreign exchange

Foreign exchange, FX or Forex is the market in which currencies are traded. Financial institutions and payments providers trade trillions a day.

Forwards

A forward conversion is an agreement, usually with a bank or financial provider, to exchange a specific amount of currencies sometime in the future (greater than two days later) for a specific rate.

I

IBAN

Interchange fee

An Interchange is a fee paid between banks from the acquirer to the card issuer each time a card payment transaction occurs.

ISO currency code

The ISO currency code is the three letters also used in exchange rates. Devised by the International Organization for Standardization it is a country’s two characters and a letter denoting the country’s currency. For example, in Hong Kong the currency is Dollars and so the ISO code is HKD.

K

Know Your Business (KYB)

In Europe: identifying the beneficial owner and taking reasonable measures to verify that person’s identity so that the obliged entity is satisfied that it knows who the beneficial owner is, including, as regards legal persons, trusts, companies, foundations and similar legal arrangements, taking reasonable measures to understand the ownership and control structure of the customer; EUR-Lex

In US: beginning on the Applicability Date, covered financial institutions must identify and verify the identity of the beneficial owners of all legal entity customers (other than those that are excluded) at the time a new account is opened (other than accounts that are exempted).

Know Your Customer (KYC)

Know Your Customer (KYC) is a requirement that protects both financial institutions and their clients. Financial institutions are required to formally verify the identity of all clients and understand the purpose of trading, expected volumes and jurisdictions their clients will use.

Know Your Client's Customer (KYCC)

Where KYC must be conducted on an underlying service user who is not directly contracting with the provider of those services. May be required in certain circumstances for named vIBANs.

L

Local payments

Local payment schemes are payment initiatives set up in a domestic market to make the payment process between banks more efficient. Schemes include ACH, Faster Payments and SEPA.

M

Margin

Margin is financial collateral used to cover credit risk and is set aside as a good will deposit as collateral to hold a position against future trades as security to cover any potential losses the provider may incur as a result of non-settlement of the trade.

Margin call

A margin call means that the exchange rate has moved sufficiently so that the initial margin held is no longer sufficient to support the “open” or unsettled trades and additional deposit is required to cover the risk to the provider.

Measuring rates

Since most currencies are quoted to a maximum of 4 decimal places, movement in currency rates, no matter how small, will have an impact on the price you pay. Rates are measured in three factors. These are spreads, pips and basis points. The spread is the difference between ‘bid’ and ‘offer’ prices.

Mid-market rate

Usually, financial institutions make money by charging different prices for buying and selling a currency. The mid-market rate eliminates this margin, and is the exact halfway point between the two. At Freemarket, is the rate we use for our matched, scheduled currency exchanges.

Money Laundering Reporting Officer (MLRO)

MT103

This is a standardized Swift payment message. It is accepted as proof of payment and includes all payment details such as date, amount, currency, sender and recipient

Multi-factor Authentication (MFA)

An electronic authentication method in which a user is granted access to a website or application only after successfully presenting two or more pieces of evidence to an authentication mechanism.

N

Nostro account

The account that a respondent bank holds at a correspondent bank, usually for the purposes of payment clearing. Described as the Nostro by the respondent bank (as derives from the Latin for ‘ours’). The correspondent bank describes its provision of these accounts to other FIs as a ‘Vostro’ or ‘clearing’ service (Vostro derives from ‘yours’).

O

Offer rate

The offer rate is the rate quoted to you when you’re about to sell currency. Also known as the ask price or sell price.

Open Banking

A banking practice that provides third-party financial service providers open access to consumer banking, transaction, and other financial data from banks and non-bank financial institutions through the use of application programming interfaces (APIs).

P

Payee

A payee is an entity receiving payments through any form of money transfer method. Also known as the beneficiary.

Payer

A payer is an entity, either an individual or organisation, that makes a payment to another entity.

Payment Service Provider (PSP)

Politically Exposed Person (PEP)

Someone who has been entrusted with a prominent public function. A PEP generally presents a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence that they may hold.

Pip

In currency exchange, Pip stands for “point in percentage”; it is used to describe how values change between currencies. It is usually measured at the fourth decimal point. For example, if the GBP/EUR rate is 1.1425, and the Pound depreciates by five Pips against the Euro, the new rate would be 1.1420; a depreciation of €5 in every £10,000.

Q

Quote rates

The quote rate is the most recent market price that a currency was traded on, meaning a buyer and seller agreed to trade at that price.

R

Regulated entities

Regulated entities are the service providers governed by financial regulation, such as banks, brokers and payments companies.

Real-time pricing

Real-time pricing gives customer information about the actual cost of the transaction at that point in time. For example we will provide the actual exchange rate along with the cost for an exchange that customer could get if the customer choose to execute the transaction at that point in time.

S

Safeguarding

Payment Service Providers acting as Authorised Payment Institutions must ensure that relevant client funds are appropriately identified, managed and protected on a day-to-day basis; this includes the clear segregation, designation and reconciliation of client balances. Client's funds are held in safeguarded accounts at authorised credit institutions (Freemarket’s Banking Partners) in the UK and EEA. Safeguarding requirements are in place to protect client funds if the payment service provider (PSP), in this case Freemarket, were to ever become insolvent.

Sanctions

Economic sanctions are commercial and financial penalties and restrictions applied by one or more countries against a targeted country, group, or individual. Sanctions may include various forms of trade barriers, tariffs, and restrictions on financial transactions.

Settlement date

The settlement date is the day on which a trade or a contract must be reconciled. The buyer must make payment of the sold currency before the conversion is processed and the purchased currency is available for payment.

Single Euro Payments Area (SEPA)

The European's domestic clearing scheme for simplifying the European banking transaction network and processing EUR payments within the SEPA region.

Spot trade

The spot rate is the price quoted with settlement usually for settlement in T+2 (fulfilment / delivery 2 business days after contractual execution) on a commodity, security or currency transaction. The spot rate, also referred to as the “spot price,” is the current market value of an asset at the moment of the quote.

Spread margin

When an institution buys a currency at one price and sells it at another, the difference between the two rates is called the spread margin. It is often denoted in Pips or Basis points.

Swift

Swift stands for Society for Worldwide Interbank Financial Telecommunications. Set up in 1973, it’s a member-owned cooperative that developed a communication platform to transmit secure financial transaction information between the financial institutions it represents.

T

Third-party payments processor

A third-party payments processor lets businesses handle transactions from various channels such as credit cards and debit cards, without having to establish their own banking relationships or set up a merchant bank account of their own.

TOD conversion

A TOD conversion is a conversion that will settle today.

TOM conversion

A TOM conversion is a conversion that will settle tomorrow (T+1). The T stands for Transaction Date.

Triangulation

Triangulation is a method of currency exchange where one currency amount is converted to another through an intermediate currency.

U

UETR reference

This is a unique reference associated with every Swift payment that is kept and shared by each bank involved in the payment.

Ultimate beneficial owner

The person or entity that is the ultimate beneficiary of the company. The underlying reason for identifying UBO is to prevent natural persons with malintent, such as money-laundering or financing terrorism, from being able to hide behind a company, foundation or other legal entity. The ultimate beneficial owner of a legal entity is the natural person who: holds an interest of at least 25% in the legal entity’s capital; OR can exercise at least 25% of the voting rights at the general meeting of shareholders OR is the beneficiary of at least 25% of the legal entity’s capital.

V

Virtual IBAN (vIBAN)

A virtual IBAN (International Bank Account Number) is issued by a bank to allow incoming payments to be rerouted to a different, real, physical bank account.

W

Wholesale rate

The wholesale market used by banks, governments, investment funds and large corporates to buy and sell foreign currency is called the Spot Market. For most currencies, the standard settlement period for spot trades is two business days.

Wire transfer

Wire transfer is the means of transferring money electronically around the world. This can be institutions, individuals or organisations. Also known as a ‘Swift payment’ as wires are dependent on Swift messaging and correspondent banking.

Question 4

How to download account balances from the platform

Accepted Answer

Downloading your currency balances is an easy and simple process.

For each currency that you have access to, if you head to the Balances tab it will show the transaction history from the account in its entirety. The overview will display the beneficiary, incoming transactions, outgoing transactions, and overall balance of the currency.

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/Y9oC1bOmzu/SS%20-%20Balance%20Download.png (SS - Balance Download)

From this viewpoint, you’ll be able to see the history for the currency – which can be located in the lefthand side of the screen – and you can toggle the side panel in order to select which currency you want to view.

Exporting the data from the platform is an easy task and you can do this in a matter of seconds. The platform by default will export the entire transaction history in your selected format. By clicking on green calendar icon (that is situated next to date), you are able to select a date range to view or export. Once, you have the currency and timeframe selected you can export the data in PDF or XLS format (as highlighted).

Question 5

How do I close my account?

Accepted Answer

You can stop using our services whenever you feel like, we’ll be sorry to see you go.

If there’s anything we can do better or you would like to leave some feedback about the service, how we can change features, and how we can improve the service, please email us.

Please email support@wearefreemarket.com and a member of our team will be touch regarding your request.

Question 6

Can I have confidence in your safeguarding processes?

Accepted Answer

Freemarket undertakes an annual audit of its compliance with the PSRs 2017 safeguarding requirements.

For more information on our safeguarding processes please see our other articles on the subject here.

Question 7

What is the difference between local and international payments?

Accepted Answer

Electronic instructions are used in both local and international transactions to transmit a secure message across a network and make funds available in the beneficiary's account. Their verification process and payment method they employ varies, which therefore has an impact on the transaction's length and cost.

For example, domestic wires in the US use the CHIPS of Fedwire systems, in the EU local payments use SEPA and in the UK local payments use CHAPS or Faster Payments. Most international wire transfers are communicated via SWIFT, a network of over 10,000 banks and financial institutions spread over 200 countries.

Question 8

Can I transfer between two accounts held at Freemarket?

Accepted Answer

Moving money across accounts allows for instantaneous settlement. This transfer within the account is quick and painless. The intra-account capability on the Freemarket platform can be advantageous when moving to another account since it allows for seamless money movement across accounts.

Be careful not to mix up inter account transfer with a intra-account transfer.

Inter account transfer – this allows you to move funds internally between accounts that you own. This type of transfer will go through our compliance checks before it settles.
Intra-account transfer – is when you can move money between accounts at the same financial institution or are keeping the funds within the same ecosystem, this allows us to instantly settle funds. A transfer of this kind we can operate straight-through reconciliation and doesn’t have to pass any additional compliance checks.

By keeping the funds within Freemarket we don’t have to use any payment schemes so it’s more cost-effective for the sender.

Question 9

Why is the amount which reaches the beneficiary sometimes less than the amount sent?

Accepted Answer

Since you gave us the order to exchange the currency, the exchange rate may have fluctuated. We don't cover this then recoup since we don't grant you credit; instead, we ask that you have a 2% buffer in place.

Our global network of banks and NBFIs, with which Freemarket has partnered up, gives us access to mid-market rates in real-time. This enhances your options and enables us to join bigger trading pools, ensuring that you receive the best prices possible.

Before completing a transaction, you will always get an updated quote when you make an exchange.

Question 10

Which currencies does Freemarket support?

Accepted Answer

Freemarket offers our clients a B2B cross-border payments platform that allows them to send payments in 31 currencies to over 100 countries. Each currency that you request or do business in, we make sure one of our partners can cater to your needs.

Our collection capability and pay out options do differ – we evaluate this on a case-by-case basis.

We can collect: AED, AUD, CAD, CHF, CZK, DKK, EUR, GBP, HKD, HUF, ILS, JPY, MXN, NOK, NZD, PLN, RON, SAR, SEK, SGD, TRY, USD, ZAR.

We can pay out: AED, AUD, BHD, CAD, CHF, CNY, CZK, DKK, EUR, GBP, HKD, HUF, ILS, INR, JPY, KWD, MAD, MXN, NOK, NZD, OMR, PLN, QAR, RON, SAR, SEK, SGD, THB, TRY, USD, ZAR.