Workers urged to use formal means to send money home

SENDING cash to family and friends overseas may be a risky business if informal channels are used.

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

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

Westminster is urging people to use formal channels, which are regulated by the Financial Services Authority, which took over regulation for money transfer operators, online money transfer services and foreign exchange brokers on 1 November last year.

The FSA will check that people running firms have not been convicted of financial crimes, while for authorised firms it will check they have enough money behind them and arrangements in place to protect consumers' funds.

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. Families in the developing world rely heavily on this money for their day-to-day expenses.

"EU legislation has recently been introduced to protect people sending money home to countries in the EU. We need to ensure that this sort of protection is extended to give those sending portions of their wages to developing countries similar security."