MSE News: RBS and Natwest move to fairer overseas credit card fees

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"The state-backed pair will stop levying their own, expensive exchange rate, which can add 2% extra to costs ..."

Read the full story:
RBS and Natwest move to fairer overseas credit card fees

Nath4n

Good! I discovered this horrible practice back in November. I paid almost 500 EUR for some accommodation in Ireland, my Nationwide card failed so I was forced to use my RBS credit card. Did all of the calculations using the Mastercard rates only to find I'd been charged £12 more than I was expecting. The call centre was absolutely useless, got passed from post to post racking up phone bills just to repeatedly be told they used the "exact set rate on the day", I was then eventually given the exact Euro rate that had been used to calculate my bill - which was around 2.4% higher than then set Mastercard rate on the day. Using all this information I eventually demanded to speak to a manager where the truth FINALLY came out. Despite what the call centre drones had repeatedly told me, RBS didn't actually use the set Mastercard rate at all but had recently started using their own rate which if I looked the the T&C's they were essentially allowed to set as whatever they wanted. I argued that I hadn't been told this either when I opened the credit account, or by the call centre workers, and was grudgingly given a £10 "interest rate adjustment" credit on my account. I suggested they make this misleading charging system clearer in the future.

I should have posted my discovery on this board really but wasn't a member, but am glad to see the article in the Guardian (http://www.guardian.co.uk/money/2010/dec/11/foreign-exchange-tesco?INTCMP=SRCH) helped expose and end this.

Toe-Jam

Why when you do reports on RBS Natwest do you always leave out Ulsterbank. They are guilty of this aswell, being the 3rd member of the group. It is buiried so far in the literature and the site doesn't show the exchange rate used that loads of customers get ripped off.

Biggles

MSE_Guy wrote: »

"The state-backed pair will stop levying their own, expensive exchange rate, which can add 2% extra to costs ..."

That should read "add 4.75% extra to costs".

All they are now going to do is add 2.75% to the Visa/MC rate instead of adding it to their own rate.

It still makes them a card not to use abroad, it's hardly good news unless you can't get any other card.

callum9999

Biggles wrote: »

That should read "add 4.75% extra to costs".

All they are now going to do is add 2.75% to the Visa/MC rate instead of adding it to their own rate.

It still makes them a card not to use abroad, it's hardly good news unless you can't get any other card.

It shouldn't because that should be wrong. They said using their own exchange rate adds 2% extra to the costs - which is accurate. Your figure is the result of their interest rates plus their commission charge.

Biggles

callum9999 wrote: »

Your figure is the result of their interest rates plus their commission charge.

No interest rate is involved, it's all their commission charge, whether they called part of it 'our exchange rate' or not. They were adding 4.75% to the real cost of converting the money, as opposed to 0% which is charged by some other cards.

The 4.75% was all their profit, not just the 2%. They have now reverted to what a 'normal' card charges, ie 2.75%.

chattychappy

Correct.. I did some tests with the Tesco card. The forex loading used to be almost 5% before any interest/cash advance fee.

davidgmmafan

About time too, this area is as clear as mud. The consumer can't easily shop around as you don't know useful things you'd need to know like the exchange rate and need to be failry adept at maths sometimes to work out which method is actually cheaper.

I don't mind them making money from this, its a service afterall, its just the underhanded way they do it that I don't like.

Biggles

davidgmmafan wrote: »

About time too, this area is as clear as mud. The consumer can't easily shop around as you don't know useful things you'd need to know like the exchange rate and need to be failry adept at maths sometimes to work out which method is actually cheaper.

I don't mind them making money from this, its a service afterall, its just the underhanded way they do it that I don't like.

In the past, I've tried to interest Which? and Martin Lewis in campaigning for a change in the law, so that you could not advertise as 'commission-free' but had to state clearly exactly what charge was involved, but neither of them saw it as something they should be doing.

We've all been down a High Street and seen the bureaux de change with their signs saying 'commission-free', and we all know they are lying. Why should it be legal for them to lie?

chattychappy

Biggles wrote: »

In the past, I've tried to interest Which? and Martin Lewis in campaigning for a change in the law, so that you could not advertise as 'commission-free' but had to state clearly exactly what charge was involved, but neither of them saw it as something they should be doing.

Yes I remember. You were one of a tiny number of unsung heros. Funny how now MSE are running it as a story when the real story was back then.

bigboyeast

Biggles

there is a law and it is based on European Payment Services Directive and its call Payment Services Regulations PSR 2009. However, the British Government exempted credit cards from the specific regulations ensuring that exchange and interest rate setting is transparent and fair thus allowing RBS and Tesco to come up with this little rip-off. I spend 5 months complaining and got nowhere. Finally had to go to the press. Now both have backed down.

Toe-jam


On the issue of Ulster Bank, if you have a credit card issued in Eire in Euro’s they were using the MasterCard Rate. The card was regulated by the Irish version of the European Payments Directive. The same card issued in Northern Ireland, used the RBS rate, as it was regulated by UK law. Clearest indicator that the UK government screwed up yet again.


Don’t expect the Government or the FSA to protect you
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