Warning over cash sent abroad

A third of people sending money to family and friends overseas may be putting their cash at risk by using informal channels, the Government has warned.

Workers in the UK typically send around 6bn back home each year, with the money providing a vital source of income for many families in developing countries.

But the Government warned that around 2bn of this money was sent through informal channels, with cash often given to friends who were travelling back to their home country, leaving people with little chance of redress if things went wrong.

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It is urging people to use formal channels, such as banks, transfer companies and foreign exchange agencies, which are regulated by City watchdog the Financial Services Authority.

The FSA has also produced new guidance on its Moneymadeclear website giving details on the different ways people can send money home, as well as what to do if things go wrong.

International Development Minister Gareth Thomas said: "For many of the world's poorest families, money sent home by loved ones is the main source of income.

"EU legislation has recently been introduced to protect people sending money home to countries in the EU.

"We need to make sure that this sort of protection is now extended to give those sending portions of their wages to developing countries similar security."

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