LONDON, March 26 (UPI) -- A British watchdog agency says banks worldwide are claiming customers' overpayments worth hundreds of millions of dollars, the Financial Times said Friday.
The Financial Services Authority, an independent non-governmental agency, launched a probe into the Royal Bank of Canada after warnings that managers were skimming off money which customers had overpaid on foreign exchange transactions.
While individual overpayments may be small, research showed they mount up to large sums, the newspaper said.
The newspaper said confidential RBC e-mails, memos, letters, account statements, transactions and bank-to-bank communications show warnings came from a woman who works in the internal investigations team in the Canadian bank's London capital markets operations.
The woman first raised the alarm in 1996, when she looked into a case showing that managers had siphoned off $50,000 a Turkish bank had overpaid on a $2.8 million foreign exchange transaction. Documents show RBC created a new account and the $50,000 was transferred to that account.
Paul Anning, a partner at the Lovells law firm which represents financial institutions in cases involving payment and settlement systems, said while law firms discourage the practice, the response is often: "Well, this is what everyone else does."
