Exchange rates

Neil_ABZ

I often use my credit card when abroad as I usually find the exchange rate preferable compared to buying currency, but something happened with First Direct that I hadn't seen before. My wife's card was incorrectly billed for AU$700 while on vacation, the mistake was noticed and the retailer promised a refund straight away. On viewing our statement both transactions showed up but were three days apart. The purchase used an exchange rate of 1.48 but the refund used an exchange rate of 1.63 this meant my wife was now out of pocket by £43. I told my wife to call the bank and explain and that they should be able to correct this but no First Direct stood firm saying the exchange rate fluctuates daily and they must go with the rate on that day.

Now knowing that exchanges don't fluctuate that much within 3 days I looked up the UK/AUS exchange and it ranged from 1.54 to 1.52 over the 3 days. I know that with my AMEX credit card the exchange rate used tends to be close to the actual market exchange rate whereas First Direct appear to be operating as a Bureau de Change with a purchase rate and selling rate.

Has anyone seen this before? I'm about to get back in touch with First Direct to complain but just wanted to see if this was common practice with most credit card suppliers.

YorkshireBoy

It might be due to a Dynamic Currency Conversion (DCC) issue. Were both transactions (the purchase and refund) made in AU$?...or was one of them made in Sterling and converted by the retailer's merchant acquirer? That may explain the large margin.

Your plight has been mentioned before on here and from memory a formal complaint usually gets a gesture of goodwill...because it's cheaper for them than dragging out an 8 week complaint process (and possible FOS referral) and tying up staff.

Neil_ABZ

the purchase and refund were both made in AU$ so as far as the merchant's concerned they took $700 and re-payed $700. I had just never heard of a credit card using different rates for purchases & refunds although admittedly I can't remember ever needing a foreign charge refunded. I can live with a couple of percent change in rates but 1.48 to 1.63 is taking the mick.

Will go down the route of a formal complaint, thanks.

jonesMUFCforever

Neil_ABZ wrote: »

the purchase and refund were both made in AU$ so as far as the merchant's concerned they took $700 and re-payed $700. I had just never heard of a credit card using different rates for purchases & refunds although admittedly I can't remember ever needing a foreign charge refunded. I can live with a couple of percent change in rates but 1.48 to 1.63 is taking the mick.

Will go down the route of a formal complaint, thanks.

Sorry but you are wrong! Every credit card works this way there is and always has been a buy and sell rate with foreign currency.
I would try a formal complaint as I am sure the bank will cough up eventually as this is not of the customer's doing.