Mums Finance

Firstly, money that you load onto your FairFX prepaid currency card is actually held by Newcastle Building Society (NBS) which is a well capitalized ‘mutual’ Building Society.

To this purpose, NBS is regulated under the Building Societies Act of 1986 as amended at the end of 2003, as well as by the Financial Services Authority (FSA). Under the terms of this Act a company can only be called a Building Society if “its purpose or principal purpose is that of making loans which are secured by residential property and are funded substantially by its members”. This Act goes on further and specifies that at least 50% of the funds raised by a Building Society must be raised from deposits from the members. In this respect, the Building Societies are much more conservative than Banks and are therefore far less risky.

Some casualties of the recent turmoil such as Northern Rock, Alliance & Leicester and Bradford & Bingley were formerly Building Societies that ‘de-mutualised’ and became Banks. This means they became companies listed on the London Stock Exchange with shareholders seeking the maximization of profits rather than Building Societies like NBS that re-invest any profits made and exist for the benefit of members. These Banks were no longer restricted by the terms of the Building Society Act and could lend far more aggressively. Newcastle Building Society does not fall into this category and carries excellent credit ratings from all the major agencies.

When your money is loaded on to your FairFX prepaid card the funds are deposited at NBS. Your funds are held in a ‘client money’ account at NBS. This is a totally segregated account which is governed by strict FSA rules regarding Client Assets. NBS cannot use this money for extending loans or for any purpose and it is ‘ring-fenced’ in the same way as money is protected in a solicitor’s client account. Therefore, in the unlikely event of NBS running into financial difficulties, the money would be protected.

FairFX itself is currently privately funded and has no bank borrowings of any nature. As such, it is in a very sound financial position. The outlook for FairFX customers is extremely positive with more growing numbers of customers using the FairFX Currency Card to get market leading exchange rates.

Popularity: 60% [?]