Give your views on travel money to the OFT

Former_MSE_Wendy · 11 October 2011 at 1:02PM

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What's this all about?[/title]
In September Consumer Focus made a super complaint about the cost of obtaining foreign currency and overseas use of credit and debit cards. See the MSE News Story for more info.

The OFT is required to investigate and it is looking for your views. Please reply with your stories or email [EMAIL="travelmoney.supercomplaint@oft.gsi.gov.uk"]travelmoney.supercomplaint@oft.gsi.gov.uk[/EMAIL].

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Purchasing foreign currency within the UK[/title]
Have you bought foreign currency in the UK?
If so these are the questions it is looking for your views on...

Choosing where to buy
1. Did you shop around at all? If so, how many retailers (ie bank or building society, bureau de change, department store, Post Office etc) did you look at?
2. How easy was it to compare what each retailer was offering? Do you think improvements could be made in terms of how retailers provide information about deals? Is there anything that would have helped you?
3. Why did you choose the retailer you used? Did you consider any offers of ‘0% commission’ and/or ‘competitive exchange rates’? If so, what did you understand these phrases to mean?

Information provided by your retailer
4. Were you given clear information on the exchange rate offered and any fees and charges (including relating to any buyback offers) that would apply before you decided to buy? Is there any other information that would have been helpful to you?
5. What information was provided by the retailer you used after the transaction on the exchange rate and any fees and charges that applied? Were these fees and charges what you expected? Is there any other information that would have been helpful to you?

Charges for using credit or debit card
6. Did you use your credit or debit card to pay for the currency? Do you know if you were charged by your credit or debit card provider for using your card to pay? Did you know whether you would be charged before you paid?

The future
7. Would you consider doing anything differently in the future?
8. Do you have any suggestions for how the consumer experience could be improved?

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Using credit or debit cards abroad[/title]
Have you used a credit or debit card to withdraw cash or buy things while oveseas?
If so these are the questions it is looking for your views on...

Before you travelled
9. Did you think about what card(s) you would use while you were abroad? Did you do any research on fees and charges that might apply? How easy was it to compare what each card provider offered and any charges that might apply? Did you apply for any new cards as a result?

During your holiday
10. Did fees and charges affect how you used your card(s)? What other factors were important?
11. At the time of withdrawing cash or making a purchase, was any information provided on the fees and charges that would apply?

After your return
12. When you came back from your trip, did you check to see how much you had been charged (eg on your statement)? How helpful was the information provided?
13. Were the charges what you had expected them to be? Did you query them with your card provider?

The future
14. Would you consider doing anything differently in the future?
15. Do you have any suggestions for how the consumer experience could be improved?

Thanks

drjimmy51 · 12 October 2011 at 10:46AM

I am generally pretty savvy about how to get the best deals for foreign currency but on a trip last year to Spain I realised how expensive drawing my own money from my current account could be.

I had a wallet containing my Nationwide debit and credit card dipped on the Madrid Metro( at that time Nationwide was still the best offer) which resulted in drawing from my Natwest current account.

On return home I discovered that to withdraw £720 of my own money I had been charged £36 for the privilige-so 5% for changing Pounds to Euros and no I was not a victim of the reprehensible dynamic currency conversion which you have to be aware of and which also needs to be tackled.

I now have a Norwich and Peterborough account for travel purposes and standing order bills with no charges so why do the main high street banks get away with their extraordinary charges for drawing our own money.

I would say some bright spark dreamed this up years ago and a proportion still goes into the bonus point each year.

Red_sky · 12 October 2011 at 1:16PM

Well, when I tried to transfer money from my Nationwide account in the UK to my bank account in Vietnam not only was I charged the usual fees by Nationwide but without my knowledge or consent I was also charged a commission by Citbank in New York for converting UK sterling into US dollars so infact I was charged twice, once by Nationwide and then again by Citibank. On querying this with Nationwide, although foreign transactions in the EU, all charges have to be transparrent and upfront, once your money leaves the EU anybody can charge you what they like without even telling you that you're going to be charged. I found that quite unbelievable but apparently the current rules re.transparrancy and knowing the charges upfront only apply in the EU. Can this be changed so we know the costs and the charges upfront no matter where our money is being sent in the world after all it should be the sending bank which is based in the UK's obligation and legal right to tell you how much you are going to be charged upfront before you agree to the transaction and not just be charged whatever the bank likes after you have sent the money.

brenda10 · 12 October 2011 at 2:00PM

I took out this card so that my daughter and her boyfriend could put their money into it together for their trip to Europe over a 6 week period. They spent up to £2000 over the period of a month and I thought even though I had a direct debit set up that I would pay it early only to see on the direct debit day that the total amount of £2000 was taken out of my account even though it had been paid 24 days prior. There is nothing clear about it as i was even charged interest on the direct debit amount even though it had been paid online 24 days prior. I am getting rid of it, and to add insult to injoury when it came to the £5 reward for spending £300 per month they forgot to give it to me and I had to ring and aske them and they noted it down eventually as a Goodwill Payment. Seemingly if you wnat ot spend money on this card you need to put the money equivalent in 2 months prior to spend and then you are charged no interest. It is a joke, instead of my card being described as a Halifa Clarity Credit Reward card ist was described as a Standard Mastercard. Not good enough.

zagfles · 12 October 2011 at 7:18PM

1-8 Don't buy foreign currency in the UK

9) Yes, used the Halifax Clarity for ATMs and old Nationwide VISA for purchases. Summary boxes of cards shows the forex fee, so quite easy to compare, but the zero charge ones highlight the fact anyway as they're the exception. Paid the Clarity off when I got back, about £3 interest for about £1000 of withdrawals.

10) Yes, for instance didn't use Nationwide for ATMs.

11) Only time a fee was mentioned was an ATM in Germany which said on screen a fee would be charged but not how much. But next to the cashpoint was a list of charges, something like EUR4 for MasterCard withdrawals and something about foreign cards your own bank would charge. Very unclear. But in the end there was no charge at all on my statement

ALso one place tried to insist on DCC, I insisted not!!

12,13) Yes, no charges for ATM withdrawals but for purchases there was a 1% charge (not explicitly mentioned - hidden in the rate) for using the Nationwide card in Croatia. This was my fault as I had assumed Croatia is in the VISA Europe area but it isnt!

14) Yes, check which countries are in VISA Europe!

15) Get tough on dishonest retailers who try to impose DCC without consent, or who claim they have no control over it. Take their merchant facilites away if they persist.

Ian181676 · 13 October 2011 at 8:03PM

I think two things need to be addressed:

1. The practise of some banks making charges for purchasing foreign currency in the UK using a debit card. This can only be with the intention of catching out the unwary as anyone who was aware of this would withdraw cash using their debit card and then use the cash to purchase the foreign currency.

2. Dynamic currency conversions at abysmal rates of exchange. I think credit card holders should, as a minimum, be entitled to opt out of this with their credit card company for all transactions. That would avoid the problem I had only a few days ago - retailer gave me a credit card slip with a currency conversion already applied and asked me to sign the slip agreeing I had been given a choice. I hadn't been given a choice and I told the retailer I wished to pay in euro. The retailer refused to do this. When I told him to either change it to euro or cancel the transaction he claimed he couldn't cancel it. After further arguing he eventually put through a second transaction for a refund (also dynamically currency converted). I went elsewhere to purchase the metro tickets I was trying to buy. If it had been for something else, e.g. a restaurant bill where I'd already eaten the food, where I couldn't just walk away without paying, I don't know what would have happened. I await my credit card bill with interest, as I didn't sign for either a charge or a refund, so neither transaction was authorised.

zagfles · 13 October 2011 at 8:29PM

Ian181676 wrote: »

I think two things need to be addressed:

1. The practise of some banks making charges for purchasing foreign currency in the UK using a debit card. This can only be with the intention of catching out the unwary as anyone who was aware of this would withdraw cash using their debit card and then use the cash to purchase the foreign currency.

2. Dynamic currency conversions at abysmal rates of exchange. I think credit card holders should, as a minimum, be entitled to opt out of this with their credit card company for all transactions. That would avoid the problem I had only a few days ago - retailer gave me a credit card slip with a currency conversion already applied and asked me to sign the slip agreeing I had been given a choice. I hadn't been given a choice and I told the retailer I wished to pay in euro. The retailer refused to do this. When I told him to either change it to euro or cancel the transaction he claimed he couldn't cancel it. After further arguing he eventually put through a second transaction for a refund (also dynamically currency converted). I went elsewhere to purchase the metro tickets I was trying to buy. If it had been for something else, e.g. a restaurant bill where I'd already eaten the food, where I couldn't just walk away without paying, I don't know what would have happened. I await my credit card bill with interest, as I didn't sign for either a charge or a refund, so neither transaction was authorised.

I don't think the credit card companies can do anything about it - they'd probably love to as (other the few fee free ones) DCC robs them of the opportunity to get the exchange rate markup. All the CC company sees is a charge coming through in GBP.

Retailers who say they can't put the transaction through in the local currency are lying. VISA and MasterCard rules state that DCC is optional and the customer must be asked, that's why you get the slips saying you've agreed to the conversion.

If you've already consumed the product, say a meal for EUR 50, then you owe EUR50. Period. You don't owe GBP45, or USD70, or any other amount. So they aren't entitled to change the charge to GBP45 unless you agree.

Having said that, a restaurant did once impose DCC on me without consent. The rate was around a 3-4% charge. I decided to just accept it and instead not leave a tip, which would probably have been around 5-10%!! So DCC cost them that time

dzug1 · 13 October 2011 at 9:36PM

zagfles wrote: »

Retailers who say they can't put the transaction through in the local currency are lying. VISA and MasterCard rules state that DCC is optional and the customer must be asked, that's why you get the slips saying you've agreed to the conversion.

Having said that, a restaurant did once impose DCC on me without consent. The rate was around a 3-4% charge. I decided to just accept it and instead not leave a tip, which would probably have been around 5-10%!! So DCC cost them that time

I wonder if they are (always) lying and it's maybe sometimes a question of don't know how. If the machine is installed by a third party contractor it could (and I admit I'm guessing here) be set up not to offer the choice without the retailer being aware that a choice is possible. I suspect many of them are as unaware of the finer points as the average customer.

And I'm not sure anyway what influence OFT can have in what a foreign merchant does. Indeed I'd guess that somewhere in the world there's a country or two whose governments have decreed that DCC is mandatory......

I trust you told them WHY you were not leaving a tip - not much point otherwise

I wonder if you'd get anywhere asking for a 5% discount for DCC? Could be worth a try

zagfles · 13 October 2011 at 9:54PM

dzug1 wrote: »

I wonder if they are (always) lying and it's maybe sometimes a question of don't know how. If the machine is installed by a third party contractor it could (and I admit I'm guessing here) be set up not to offer the choice without the retailer being aware that a choice is possible. I suspect many of them are as unaware of the finer points as the average customer.

I doubt it - a few times I've been told I can only pay in GBP but on insisting they've always managed to put the payment through in EUR (or the local currency). They've come out with all kinds of rubbish - latest one in Germany was my bank is unlikely to allow the transaction in EUR!!

And I'm not sure anyway what influence OFT can have in what a foreign merchant does.

In this day and age with people travelling a lot I'd have though the OFT works with their counterparts in the rest of the world, particularly in the EU. Foreign tourists to the UK get ripped off by DCC too. Qu. 11 above specifically asks about being informed of charges when abroad, so guess they are interested in practices outside the UK.

Indeed I'd guess that somewhere in the world there's a country or two whose governments have decreed that DCC is mandatory......

Then VISA/MasterCard probably would boycott that country...

I trust you told them WHY you were not leaving a tip - not much point otherwise

No. You're right I should have.

I wonder if you'd get anywhere asking for a 5% discount for DCC? Could be worth a try

They won't make 5% off DCC unless it's a far bigger rip-off than usual...think the retailers don't see more than 1-2% usually.

Give your views on travel money to the OFT

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