# Pre paid Euro cards



## Rapide561 (Oct 1, 2005)

Hi

This is not really continental touring, but is applicable to continental touring.

There have been quite a lot of mentions recently on the forum about pre paid Euro cards.

One is www.fairfx.com and another is www.caxtonfxcard.com

I note that there is a charge of €1.50 for an ATM withdrawal overseas as opposed to the Nationwide's current charge of zero within the EU. I thought the cards were totally free to use, but this is not the case. A recent complain to the advertising standards agency upheld a complaint in this respect.

If I loaded a card with 1000 euro, and the card provider went bust, am I entitled to a refund? The two cards mentioned are provided by the Newcastle Building Society.

What other pre paid cards are you all using and are they totally free?

Thanks

Russell

This link is about the complaint to the ASA.

http://www.asa.org.uk/asa/adjudications/Public/TF_ADJ_43978.htm


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## hiker (Jun 22, 2008)

We use the Caxton one. Don't see a problem with the small charge for cash withdrawals as they're giving a good exchange rate anyway - but we use the card to pay where possible & don't use much cash.

There's a minimum 150 euro load & we wouldn't load a huge amount at a time as we can text them & transfer whenever we want from a specified bank account, (or via their website) - but surely the Newcastle Building Society would be responsible if anything happened? I think I checked that out when we applied for ours.

PS Have just read the link you included - we applied for ours after that date & presumably the problems had been sorted - we certainly knew the charges etc, & have compared exchange rates with high street ones ourselves.


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## Rapide561 (Oct 1, 2005)

*Caxton*

Hi

Yes, the ASA link is last year, but is was second on the list when I did an internet search for Caxton.

I have emailed the Newcastle to ask them about financial liability etc. I have also sent the same email to the Financial Services place.

Russell


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## SpeedyDux (Jul 13, 2007)

Rapide561 said:


> If I loaded a card with 1000 euro, and the card provider went bust, am I entitled to a refund? The two cards mentioned are provided by the Newcastle Building Society.


Russell,

That's a very good question. Is it technically a "deposit"? Will it be covered by the Financial Services Compensation Scheme if the card issuer goes bust? Do let us know what replies you get. You could also contact fscs.org that operates the compensation scheme.

I don't have one of these pre-paid cards (yet) but there is a useful webpage about them on the Moneysaving Expert site:

http://www.moneysavingexpert.com/cards/prepaid-cards

Cheers,

SD

PS I think this is my 500th post! Wahay!


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## Rapide561 (Oct 1, 2005)

*Cards*

Hi

I thought I had had a quick reply from the Newcastle, but it was merely to say the email address was invalid. The email address on the Caxton Website states [email protected] but the FairFX site states to contact [email protected] , so I have resent the email.

Watch this space.

Russell


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## Rapide561 (Oct 1, 2005)

*Cards*

Hi

Here is the info from the Newcastle.

Quote

Good Morning

For a full explanation for your query please see our website: www.newcastle.co.uk/savings/reassurance

While this does not mention our Prepaid Card Products specifically, they do fall under other Strategic Solutions. Further details of our Prepaid Cards can be found at www.nssl.info.

I hope this will answer your queries, if not please do not hesitate to contact us further.

Unquote.

Russell

I would advise anyone requiring further clarification to contact the Newcastle and ask the question directly.


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## SpeedyDux (Jul 13, 2007)

Russell,

Those weasels didn't give you a straight answer to a simple question. Typical financial services. They don't make it easy for the consumer to find out. I wonder why.

Having looked at the links, and especially http://www.nssl.info./cps_legals.aspx#current it appears to me as though the prepaid Euro cards might well not be covered by the Financial Services Compensation Scheme.

Although on the Caxton FX website it is stated: "This card is issued by Newcastle Building Society pursuant to licence by MasterCard International Incorporated. Newcastle Building Society is authorised and regulated by the Financial Services Authority (www.fsa.gov.uk/register) and is entered in the Financial Services Authority Register under Registration No. 156058 email: [email protected]" this in my opinion is somewhat misleading.

These prepaid Euro cards issued by Fairfax or Caxton are merely using the Newcastle BS brand under agreements they have with Newcastle BS. They are independent companies and not subsidiaries of Newcastle BS. They are completely separate legal entities. In the Newcastle jargon they are "service providing partners".

These are extracts from the Newcastle Strategic Solutions Ltd. (subsidiary company) web page:

"Our service providing partners (System and Processor) will be selected and monitored to ensure a quality service is delivered."

"Processor
The Processor is responsible for the technical system which authorises or declines each transaction. *All card balances are held on the Processor's system.* The Processor also manages card production and implements velocity checks as part of card fraud management." (emphasis added)

I can't be certain of this but in this context "Processor" appears to refer to Fairfax or Caxton.

In other words, (Babelfish translation begins here) the money is "loaded" onto your prepaid Euro card by transferring it from your savings account with the Newcastle BS to the service providing partner "Processor" which then keeps it as a balance on its system until you use the card. Unless the service providing partner itself is covered by the Financial Services Compensation Scheme my guess is that your balance on the prepaid Euro card won't be protected if the service providing partner itself goes bust. I doubt if this will have anything to do with the solvency or otherwise of the Newcastle BS itself simply because they won't be holding the money any longer in your account with them.

I think what is likely to happen in practice is this. Your money is guaranteed up to £50K under the Financial Services Compensation Scheme as long as it is held in a savings or current account with the Newcastle BS itself. When you "load" money onto the prepaid Euro card, the balance on your savings or current account will reduce by a corresponding amount. The amount that is actually guaranteed will therefore reduce accordingly. While that money is on the prepaid Euro card, it appears in fact to be held by Fairfax or Caxton in Euros, not by Newcastle BS or its subsidiary companies. Therefore in my view it could well be at risk if Fairfax or Caxton go bust.

In that unfortunate event, the Newcastle BS might well turn round and say "Sorry Russell, nothing to do with us, legally speaking. See if you can get any money back from the Financial Services Compensation Scheme. You're on your own. Good luck. Have a nice day. Byee."

If there are any financial services bods out there who wish to differ, feel free.

Cheers,

SD :roll:


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## Rapide561 (Oct 1, 2005)

*Caxton*

Hi

Here is the email response received today from the FSC.

Quote

Thank you for your e-mail of 30 April 2009 concerning the role of the Financial Services Compensation Scheme (FSCS). The FSCS is a fund of last resort, which deals with claims for compensation against firms that are no longer trading and cannot honour claims against them. If you require more information you can log onto our website at www.fscs.org.uk. Our rules and regulations can also be found on the Financial Services Authority's website at www.fsa.gov.uk.

In answer to your query, Electronic money is not considered to be a deposit held by a bank or building society, but a method of payment. Funds are held on a pre-payment credit card (for example) and used in the same manner, as one would cash/currency, and are therefore not protected by the FSCS. This is also mention at point 17 on the following Caxton Card webpage http://www.caxtonfxcard.com/termsncondition.asp?dist=CAXTGENL

I hope the information contained in this e-mail has proved helpful. If you have any further questions, please telephone our helpline on 020 7892 7300, and we will be happy to be of assistance.

Yours sincerely

Unquote


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## pippin (Nov 15, 2007)

paddle creek without up

why can't they just use plain English like that!


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## Telbell (May 1, 2005)

Thanks Rusell

The salient statement from all that seems to be:

"this means that in the unlikely event that Newcastle Building Society becomes insolvent your funds may become valueless and unusable and as a result you may lose your money."


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