Bank Charge for Buying Foreign Currency with my Debit Card

luke222010

Hi all,

As the title says, i've been charged for buying foreign currency with my debit card.

I purchased some Mexican Pesos, to find i've been handed a £14 "visa charge" from my bank Co Op a couple of days later.

Just queried it with my bank and the customer service advisor tells me that it will be a commission charge from the bank.
I don't understand how they can charge me commission on something they're not directly providing a service for?

I ordered my money from Moneycorp who state they do not charge commission or any other fees for providing currency, so why do my bank?

I'd appreciate it if anybody can offer some info on whether this is legal - i'm pretty sure i read an article about 12 months ago on the mail saying the Office of Fair Trading had put a stop to banks enforcing these charges...

Wywth

luke222010 wrote: »

Hi all,

As the title says, i've been charged for buying foreign currency with my debit card.

I purchased some Mexican Pesos, to find i've been handed a £14 "visa charge" from my bank Co Op a couple of days later.

Just queried it with my bank and the customer service advisor tells me that it will be a commission charge from the bank.
I don't understand how they can charge me commission on something they're not directly providing a service for?

I ordered my money from Moneycorp who state they do not charge commission or any other fees for providing currency, so why do my bank?

I'd appreciate it if anybody can offer some info on whether this is legal - i'm pretty sure i read an article about 12 months ago on the mail saying the Office of Fair Trading had put a stop to banks enforcing these charges...

I don't know about the legality or otherwise of these charges (I would suggest you seek independent legal advice if you want to know for certain) but, to coin a phrase, it does sound morally repugnant doesn't it?

According to the banks tariff of charges, it does say they will charge 2% or £2 (whichever is the greater) for the purchase of foreign currency with a card.

If the bank won't refund, I suggest you vote with your feet and switch banks.

dunstonh

As the title says, i've been charged for buying foreign currency with my debit card.

That is quite normal. Most banks have similar.

I don't understand how they can charge me commission on something they're not directly providing a service for?

VISA have to handle the conversion to sterling and deal with the transaction. So, they are involved.

I ordered my money from Moneycorp who state they do not charge commission or any other fees for providing currency, so why do my bank?

You are being charged for the method of payment. Moneycorp are also charging you. They are just hiding it within the exchange rate.

i'm pretty sure i read an article about 12 months ago on the mail saying the Office of Fair Trading had put a stop to banks enforcing these charges...

No. That was something different.

luke222010

dunstonh wrote: »

No. That was something different.

No, it was the same thing (I can't post the URL as I'm still a newbie but if you do a google search for: "OFT-orders-banks-scrap-debit-card-charges-buying-foreign-currency" you'll see the link to the dailymail):

"Banks have also agreed to review certain marketing practices, including the use of '0 per cent commission' deals, which the watchdog argued is misleading as the transactions are not fee-free.
From the end of 2012, consumers will be able to use their debit cards to buy foreign exchange from banks, bureaux de change, the Post Office and travel agents without any hidden charges simply for paying on a card."

"Five banks – Barclays, Co-operative Bank, Lloyds Banking Group, Royal Bank of Scotland and Santander – currently impose a charge of 1.5 and 2 per cent on customers using their debit cards to withdraw foreign currency before leaving the UK.

They have all agreed to scrap these charges by the end of 2012 under the new rules."

The 2% charge mentioned is exactly the amount Co-op have passed on to me. So it looks like come the end of 2012 they will put a stop to the fee.

luke222010

Wywth wrote: »

I don't know about the legality or otherwise of these charges (I would suggest you seek independent legal advice if you want to know for certain) but, to coin a phrase, it does sound morally repugnant doesn't it?

According to the banks, it does say they will charge 2% or £2 (whichever is the greater) for the purchase of foreign currency with a card.

If the bank won't refund, I suggest you vote with your feet and switch banks.

Morally repugnant, definitely. I've wrote a letter to express my views and see if I get a refund.

If not, i'll be taking my custom elsewhere. After all, I pay £13 a month for my account, and I've banked with HSBC and Halifax previously, and have never had charges from those banks before even though i've used a VISA debit to purchase currency.