Ryanair - I am fed up with years of being tricked into Dynamic Currency Conversion

peterbaker

SHORT VERSION courtesy of jayok:

I wanted to pay for a €5 flight with Ryanair and it tried to charge me £5.04 when I use their exchange rate. I then used the Neteller rate and I was charged £4.86 so watch out when you are paying!

ANNOYINGLY LONG VERSION (still open to suggestions for editing for maximum effect) for those with unswerving patience and at least 5 minutes to spare!:

Those of you who have seen my contributions over the years will have seen I have been a severe critic of merchants who trick us into Dynamic Currency Conversion (DCC). It has plagued non-Euro cardholders throughout Europe for far too many years.

Basically it was a jolly wheeze dreamed up by the monopoly card networks e.g. VISA and Mastercard and the retail merchants banks who provided the card payment systems at point of sale.

It is first and foremost obvious to any right thinking person that the faceless big processing networks and their middlemen banking partners have for decades creamed off far too much from the retail merchants in transaction percentages.

DCC seems clearly to have been dreamed up as a sop to complaints by retail merchants "You are charging us too much to accept card payments".

The card networks, via the retail merchants network processing banks offered something like this I think:

"Well try DCC, and you the retailer can have a cut of the foreign exchange transaction if you like which will make our transaction charges easier to bear. If you like we will even make the system slick so you can easily apply DCC to the customers, thereby reducing your own total costs per transaction."

"Luvverly jubbly" the retail merchants said.

"Just one thing" the processing networks might have said, "....to use this new DCC scheme and to show we are all whiter than white, you have to give the punters a free choice of the old way (which costs you retailers dear) or the new DCC way which saves you retailers money. OK with that?"

"YES!!!" they all said, through no doubt gritted teeth.

"OK" they all said and put it in the rules for operating within the respective networks.


So, what really happens in practice?

For the majority of retail merchants who wish to be edgy, then it's DCC of course, with very of them offering a free choice except for example enlightened arge supermarket chains who see it as more trouble to their reputations than it is worth. Bank ATM machines are also very tricky in the way they present a choice.


I am sorry, but Ryanair are as guilty as any. Initially they offered no choice whatsoever that I ever found. Perhaps a couple of years back, perhaps more recently, they responded to criticism by including a little known link to a small popup in which you have to remove a tick from a box against Ryanair's deliberately misleading recommendation "We recommend you do not untick the checkbox so that you receive our guaranteed exchange rate". I make no bones about the suggestion that the wording of this recommendation might clearly contravene current Consumer Protection Law.

I have read many times questions on MSE querying Ryanair's Foreign Exchange conversions which seem to mislead many into paying too much. Some people seem to have paid much too much, but I haven't got to the bottom of that. But I do now have the clearest example that Ryanair lures customers into the trap of a DCC transaction and takes a clear percentage additional charge by doing so.

Only today did I do a simple booking which really brought the matter clearly into focus for me for the first time and that was only because I was prepared to experiment on their website because it was one of their limited promotion flights of just £5 including taxes and fees.


I had bought a return flight for £5 each way to a destination. I had used my Neteller card to pay for it. I had to top up my Neteller card by a minimum of £15 (Neteller rules). That meant I had a spare balance of exactly £5 on my Neteller card when I had finished. So far so good.

Then I had a second thought and decided to book an alternative one way inbound flight to give me flexibility on when I come back.

Because it was in Europe, and the final booking was to be quoted by Ryanair in a currency other than my card currency I was very curious as to whether my £5 Neteller balance would be enough. Before I knew it (and even though I am aware that Ryanair has some jiggery pokery with DCC) I had clicked on "Purchase Now." As soon as I had done so I thought "Silly boy, it is processing your payment and you have not even chosen if you want it charged to your card via DCC in GBP or charged directly as the foreign currency". Guess what? Neteller declined it.
Ha! So I got a second chance. "Try Again", the Ryanair button offers and it only takes you back one step, so that's nice.

Right then, I know there is a smallish "More Information" link to look out for to kill this DCC thing dead - I read about it on MSE. Oh ... maybe there are two ... let's try the top one .... yes ... that must be the one because in small print it says 5.04GBP next to it too ... that's why the payment declined ... 4p short! Well I guess I should thank Neteller!

So then, what does this link lead to? A popup window which says:

Currency Conversion Offer

Exchange rate of {Foreign Currency abbreviation} 0.XXX0XX0 to GBP on 14 October 2010 = GBP 5.04

If you do not wish to accept the exchange rate please untick the check box below. The rate on this currency transaction is guaranteed and will not wary. <---- yes very funny Ryanair, is that w there for a pun?

If you untick the checkbox below, the rate you receive from your bank is not guaranteed, and is subject to daily fluctuations, which could result in a significantly higher cost to you.

Please go to our terms and conditions for details of our guaranteed exchange rate.

We recommend you do not untick the checkbox so that you receive our guaranteed exchange rate

Yeah right! I will untick the box and to hell with their recommendation - let's see how they like that!

So I untick it and get back to "Purchase Now", and hey presto, the payment works!


I went back to look at my Neteller account. I was charged £4.86

I look at my Ryanair Itinerary email

Interestingly, at the foot it says:

Customer Payment 1. x.xx {Foreign Currency abbreviation}
Exchange rate: 0.XXX00 GBP
Total paid: 5.04 GBP
Customer Payment 2. x.xx {Foreign Currency abbreviation}

The first payment was declined but it doesn't say so, so I don't know why that is on my Itinerary, but never mind that.

The second non-DCC payment was charged by Ryanair directly in the Foreign currency and it succeeded because it was 3.7% less.

I think it is time Ryanair and their pals at their bank and at Mastercard were told to stop deliberately flouting the law. I would argue that they are so big that they are probably in DCC transaction number terms one of the largest volume merchants on the Mastercard network, and that these online website click-tricks are not free-choice, but more akin to a sleight of hand by the website designers.

What do the rest of you think?

jayok

Too long ..

peterbaker

Yes it has been going on far too long ...

As for the piece, if you can improve it by editing, then be my guest and post an improved version and I will remove mine.

jrrowleyws

jayok wrote: »

Too long ..

Worth reading though, very interesting

jayok

Ok, go with this one

I wanted to pay for a €5 flight with Ryanair and it tried to charge me £5.04 when I use their exchange rate. I then used the Neteller rate and I was charged £4.86 so watch out when you are paying!

peterbaker

:rotfl: OK point taken - it probably would well satisfy an English Language precis test, but your version kind of has a tiny bleat style about it, don't you think? I prefer something a little more weighty for the time being but I am open to further suggestions ...

budgetflyer

I prefer your version Peter. Lots of detail and the process you went through as well as a bit of info as to what DCC is all about.

It may be worth pointing out that the worst credit cards can charge up to 3% anyway on foreign transactions, so the difference might not be as great as the 3.7% you experienced.

To improve it, maybe some screen shots , edited with the relevant bits circled.

fifeken

Slightly off-topic (but not too much I hope).

peterbaker - did you have a long lasting thread a few years ago about DCC with Ryanair and Nationwide BS? If yes, what was the outcome as I don't recall how things transpired?

peterbaker

Yes you remembered well, fifeken. I discovered Ryanair had introduced no choice DCC by accident about a year after they started it. I am not sure exactly when that was, but I am guessing it was about 3 or 4 years ago. I complained to Nationwide and they were right onto it, even refunding the differences that were on transactions more than 120 days old. There was some kind of 120 day limit for normal disputes but they eagerly waived it. They even sent me a stack of dispute forms for future Ryanair flights . They were very much up for complaining centrally about it.

How times change. Nationwide clearly were fighting a lone battle in the end - one they are losing fast now and having to introduce VISA FOREX charges bit by bit.

Regarding the comparison between typical DCC markups and normal Credit Card FOREX charges, budgetflyer, do remember that the +3.7% I am talking about is a straight comparison of net cost via Ryanair's DCC and net cost via Neteller's Net+ Prepaid Mastercard.

I appreciate that normally DCC at a Spanish restaurant for example versus a Barclaycard for example is only going to be a percent or fraction of a percent different in net cost, but it looks like Ryanair are doing something a bit heavier than that.

Anyway, I do take budgetflyer's hint about screenshots and I pay tribute to ermepb who some time ago kindly did put an exceptionally useful post together with screenshots This one: http://forums.moneysavingexpert.com/showpost.html?p=33264447&postcount=23