Warning - Foreign Purchases transacted in GBP by foreign bank

feival · 29 August 2005 at 11:17PM

Normally when abroad if you make a purchase on a credit card you purchase in the foriegn currency and your home bank translates the charge into GBP and charges an average of 2.75% for this. Nationwide have been almost unique in that they perform this task without charging the 2.75% charge. As a result I have a nationwide credit card for all purchases abroad.

I have just come back from Spain and have spotted a new trend that undermines Nationwide's offering

A few stores in Spain have actually charged me in sterling for my transactions. In each case a loading fee of 3% has been added to the transaction when they billed me in GBP. I did not realise that this had happened but now on inspecting the receipts in one instance it is fairly clear.

One transaction was in El Corte Inles - the Spanish equivalent John Lewis. The recipt looks like normal except in the middle in small letters it states in Spanish (!) that the transaction is in sterling and it states the exchange rate and GBP cost. This has been loaded by 3% when compared to the other transaction in Euros that Nationwide have not loaded up but the reciept does not state that is has been loaded by 3%.

The other two transactions were in a small opticians. In this case in English it clearly states in English a mark-up of 3% has been charged, the exchange rate applied and a statement acknowledging that I had been offered a choice of currencies for payment (not true) and that the rate is final etc. I have now ended up paying 3% more for the items I bought. Both items appear on my nationwide statement as GBP transactions with no indication that any currency conversion has taken place.

Also, when taking cash out of a "La Caixa" cash machine (main bank in Catalunya) I was offered a choice of transacting in Euros or GBP - both cases you get given Euro notes. Because I have a nationwide current account I don't pay the typical 3% loading so I selected euros. Otherwise I would have fallen victim to the stunta above.

In summary be very careful when abroad that you are transacting in local currency and that if they have converted it to sterling make sure the rate isn't loaded. If the rate is loaded and you are using a nationwide card insist on them billing you in local currency. If you don't have nationwide cards then this probably won't affect you - you are paying the 3% charge anyway

ManAtHome · 30 August 2005 at 1:42AM

Has been a couple of threads on this - looks like it's only happening in parts of Spain at the mo. Not a major problem for most credit cards, but you do need to check (and refuse) at point of sale for Nationwide cards.

chris_k · 30 August 2005 at 2:58PM

It's not just happening in Spain. While checking out of my hotel in Bangkok the credit card receipt was converted to GBP. I asked for the transaction to be voided and redone in Thai baht which the hotel cashier did without question. I have also found most hotels and restaurants I have been to in the Republic of Ireland have charged GBP.

rocking_horse · 1 September 2005 at 8:37PM

On Sunday,At the Pulitzer,a five star hotel in Amsterdam I was presented with a form to sign for "quick checkout" that said in the small print that the signing of the form entitled the hotel to charge in pounds sterling.Luckily I spotted It and crossed through it. Upon leaving they still charged me in sterling,against my wish, I had to tell them to cancel and redo. The moral here is that it is not only backstreet places that try this on but it could be anywhere.

feival · 2 September 2005 at 4:35PM

rocking_horse wrote:

The moral here is that it is not only backstreet places that try this on but it could be anywhere.

To be clear the places I went to were not backstreet at all but VERY mainstream!!!

DesG · 2 September 2005 at 5:14PM

feival wrote:

To be clear the places I went to were not backstreet at all but VERY mainstream!!!

LOL, don't panic, I didn't think you had

It doesn't matter about the class of the establishment, or even the type, it just depends if they have signed up with one of the ever growing band of Merchant providers that use this currency conversion scam (DCC I think it is called).

Spread the word, it is a scam, and it is spreading like wildfire.

Only solution, refuse to sign anything but a slip in local currency.

If you have a normal credit card it is only costing you about 0.25%, if on the other hand you have one of the nice credit cards that don't charge for currency conversion, you are paying an extra 3%.

Cheers, Des.

MrChips · 11 September 2005 at 10:30PM

I am off to Spain next weekend and want to avoid being ripped off.

How do I find out what currency I am being charged in? Will the credit card slip say the price in pounds if they have converted it for me, or will I be none the wiser until I get my statement? In the first thread it seems to imply if you study your receipt carefully you can tell but it is probably too late by then! Can you tell before you get your receipt?

Any advice to avoid this annoying trend?