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Offshore Banking: It’s Not As Scary As You Might Think

Retire Overseas Glitches, Part 1–Demystifying Foreign Banking

“My husband and I are two months into our move from South Florida to South Wales,” writes Euro-Correspondent Jann Seal.

“We hit the ground in Monmouthshire after a year of careful planning, thinking we had covered all the bases, but still there have been glitches. Banking was one of them.

“How best to transfer funds from the United States to the UK was a major question for us. Staying within the U.S. banking rules and regulations is not difficult, but the process takes time and patience.

“The first step was opening a bank account in the UK. We accomplished this on our reconnaissance trip six months before our actual move. But getting funds into that account without incurring big costs became a challenge.

“Exchange rates were fluctuating every day. But after playing the waiting game and trying to second-guess international currency rates, we decided that a few pennies here or there wasn’t as important as building a bank account that would see us through the UK side of our relocation.

“Our first major bank transfer from the United States to the UK was done bank-to-bank. It was safe and protected. Our funds were deducted immediately from our U.S. bank, but then they hung somewhere in cyberspace, earning interest for the bank, before they appeared in our new UK account three days later.

“Factoring in the exchange difference between the pound and the dollar (which dropped while the money was in cyberspace somewhere), adding the US$40 bank charge to the cost of the transfer, and being left hanging for days wondering what had happened to our money was, altogether, an eye-opening experience. I knew that we’d need to find another option for future transfers.

“I found Xoom.com while watching Le Tour de France on television last summer. It advertised the low rate of US$4.99 for transfers. I researched the company, was satisfied that they were credible, and signed up. My first transfer was small, a test to see if it actually worked. It didn’t.

“I received an online message telling me that my transfer couldn’t be completed because of a problem that couldn’t be divulged because of ‘privacy issues.’ It was my money we’re talking about, and yet they couldn’t tell me what problem my money was experiencing?

“I phoned India (where their call center is located…I didn’t like this but figured I had to get over that). I got nowhere.

“I called my U.S. bank. They’d never heard of Xoom. I called my bank in the UK. They hadn’t heard of Xoom. I was worried.

“I sent an e-mail to the chairman of Xoom (start at the top, I always say). Within minutes I got a phone call from the office of the chairman to discuss my problem. The situation was corrected (though their explanation of the ‘problem’ defied my understanding).

“My money arrived in my UK account; the transfer was successful overnight. And it had cost me less than US$5. Subsequent transfers were credited immediately. We were on a roll! Glitch resolved.

“Time to move on to another one–namely, trying to make a payment from our U.S. account, to pay a U.S. bill, from a computer in the UK.

“Our bank has deeply embedded security. This is a good thing, of course, that can also be a nuisance under certain circumstances. In my case, the circumstances were the IP address.

“The IP address (your computer’s ID number) you use to do your internet banking in the United States will be the address of the computer when you set up your internet banking. When you move to another country and subscribe to a different internet service provider, your computer will have a different IP address.

“Our first attempt to pay our Skype bill was denied. I investigated. There were funds in the account. The passwords were correct. The mystery deepened until I wrote to Skype. Their canned response told me to contact the bank (I had already spoken to India). Then to contact Skype (more India). Then my bank’s security desk (India again).

“Bank security recognized that the different IP address was flagging the transaction and denying it. After a few clicks of the bank’s computer, my account was unlocked, and the payment went through.

“My suggestion: Call your U.S. bank and let them know you will be relocating in advance of your move. Talk to the call center, not your local branch, because it’s the call center’s technical support team that controls access to your account.

“Call again after you have relocated and obtained your new internet service to reiterate the details of your move.

“Meantime, your local ATM is good source for taking money out of your U.S. account, at least in small amounts.”

Kathleen Peddicord

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