Chile Forum

I recently requested that my credit union in the US send $10,000 to my wife's checking account in BBVA via electronic transfer. After obtaining all the necessary info from BBVA, my bank sent it in Chilean pesos (converted for free) to avoid a commission for converting from $ to CLP when it arrived. The money arrived today, but according to BBVA the amount was in US$ and is for $9,574.74, $475 less that was withdrawn from my US account. They can't explain (at least over the phone) what happened to the $475. Has anyone had similar experiences? Any advice for when we visit the bank to find out what is going on? To whom do we complain (or report a theft) if the $475 is not forthcoming?

I'll appreciate any suggestions.
Jim S

Just a shot in the dark, but my guess is that there was an intermediary bank along the way that converted it from pesos to dollars and charged a fee for it. Theft yes, legal theft would be a better term.

You transfer 10k and really expected 10k to reach your bank account?

My Corpbanca account got charged for receiving funds from a third party from the States....there crafty let me tell you!!

Iv'e used paypal to transfer funds to New Zealand and it wasn't near what the banks were gouging me. It was less than $500 and came out of my Canadian bank account with a fee that I thought was reasonable. The banks charged us at both ends plus an exchange fee which was over the top.

Ripsigg wrote:Just a shot in the dark, but my guess is that there was an intermediary bank along the way that converted it from pesos to dollars and charged a fee for it. Theft yes, legal theft would be a better term.

That was my thinking too.

There is basically a scam that goes on where the intermediary banks pass along however much of your cash they feel like and then the banks at either end hold up their hands and say "sorry, it wasn't us!". It has happened to me too (though it was $30 per go, not $500).

James.

Hearing this I would say that its the following:

I will bet that the bank has an in-house lawyer that deals with all things Chilean but nothing that comes from outside the country. They most likely contract with a law firm in Chile or Miami, where the money goes through, and it's their fee yo see for them to handle it. So say the fee is whatever percentage of the transfer an this case seems to me about $500 bones. The contracting law firm charges say $350 to cover the transfer and the bank tacks on an additional 150 for themselves. The idea is most likely to insulate the bank from an issue if the funds are found to be laundered in some way or gained illegally etc. Its most likely a decision or policy made at corporate level and would not necessarily be known to the standard account executive. I would guess that the a/e would really have to push to get the info for you and would be surprised at the response about the fee. "Lo que pasa Senor Gringinto, es que el banco...tiene que manejar dineros ingresando del extranjero, atraves de nuestros abogados...el riesgo...blah, blah blah....

I would imagine they do not have to do this but can do it and most likely do so that they can get more cash then what a simple changing fee the money would get them. Additionally, I believe you stated that the transfer was sent in pesos so there would be no fee for changing anyway so it would be an easy call.

When I bring money in, I go to my account executive on the go and basically call in the money as it passes into Chile or the "mesas" as they call them and always in cash. This can be a day or so and so usually its 3 days before the $ lands in my account. I go US dollars all the way so that if there is a political issue in country, i can always choose not to change until its too my advantage---plus when I am speaking in dollars---when i talk in pesos with the bank, its like its their money already.

puelche

From the archives on my hard drive:

...The letter-writer makes a good point about banks that "pinch" you along the way when you transfer funds abroad. However, these fees (or "bytes" as I call them) can be avoided. The company sending a wire internationally simply needs to add the following instructions to the originating bank: "Send all ‘charges our.’" This means that any charges by intermediary banks are charged against the account of the remitting company and the recipient gets the full amount sent....

Does anyone know if this is still true or can someone experiment with it on their next transfer?

Atte.,

RCX

regioncentralX wrote:From the archives on my hard drive:

...The letter-writer makes a good point about banks that "pinch" you along the way when you transfer funds abroad. However, these fees (or "bytes" as I call them) can be avoided. The company sending a wire internationally simply needs to add the following instructions to the originating bank: "Send all ‘charges our.’" This means that any charges by intermediary banks are charged against the account of the remitting company and the recipient gets the full amount sent....

Does anyone know if this is still true or can someone experiment with it on their next transfer?

Atte.,

RCX

I have done this, all charges paid by the bank I was sending from. The exact amount we determined would be processed into my aus bank was (to my surprise). I was sure there would be some further skimming from either the intermediate bank or my aus bank, but there was none. This was FROM chile though, not into Chile.

regioncentralX wrote:From the archives on my hard drive:

...The letter-writer makes a good point about banks that "pinch" you along the way when you transfer funds abroad. However, these fees (or "bytes" as I call them) can be avoided. The company sending a wire internationally simply needs to add the following instructions to the originating bank: "Send all ‘charges our.’" This means that any charges by intermediary banks are charged against the account of the remitting company and the recipient gets the full amount sent....

Does anyone know if this is still true or can someone experiment with it on their next transfer?

My experience is that this can be done, but the originating bank normally charges a hefty premium for this service.

5% in fee, as OP paid sounds like an awful lot. I pay 0.6% + IVA with Banco de Chile ( + minor fixed fee in originating bank).
Exchange rate is always better than the one observed on for example oanda.com

To the best of my knowledge, you can´t remit Pesos to Chile. If you say your bank sent the money in Pesos, I would question it, but let´s say they did ( or tried), the intermediary bank would convert them back into US$ in order for them to be able to make the remittance, which is why you ended up receiving US$. Obviously the spread on the buy/sell rates is going to take a chunk out of your funds anyway. As you sent funds from a bank which is not BBVA, they would have to send it via an intermediary but from my experience , this charge could be say US$50 or so. When the funds reach Chile, BBVA may or may not rip you off for having had the pleasure of receiving the money for you, and that commision, I find , depends on the bank you use and what your relationship is with them. As others have said on the subject of Chilean bank rip offs, they are unique and as they all seem to have a cosy unwritten agreement as to how to rip off customers as well as offering a third world standard of customer service, there´s nothing we can do about it but to bend over and take it.

We use to run in to this problem a lot.

You need to make sure the "paid" flag on the swift message in the system is set. Make sure to get a copy from your bank outside the country. They have a way of magically being unset at banks in Chile so they charge you twice, and all the banks along the way will also. The originating bank then becomes responsible for the fee in the SWIFT system.

As for the middle men pinching, they often seem to be the "too big to fail" group of banks (citi, bank of america, insert <slime ball financial institution here>). The same ones we are forced to route wires through sending in to the States or where ever when sending wires.

By the way, sending $10,000 US does not necessarily get you off the hook for money laundering compliance paperwork. It is cumulative. It is not some magic number that guarantees you are exempt from the paperwork, so be ready to document source and destination. They will flag you for review if you send it on a regular basis, or seem to be trying to stay under the rader number.