Credit card exchange rate scam

Workandpay

While in Spain for two weeks in June I used my Saga card to pay and thought I was always paying in Euros. When I got home I noticed that most of the transactions were converted at slightly above €1.39 to the pound, but four of them were much lower, at around 1.35. The worst of the four though was a cash withdrawal from Banco Santander at 1.32 to the pound.

Then I noticed on the cash withdrawal receipt that it says in English "I accept that I have been given a choice of currencies and that this choice is final. I accept that the conversion rate, the final amount and that the selected transaction currency is GBP". On two of the other three receipts there were similar statements.

The fact is though that I was not given a choice. It was not mentioned and was not a menu choice at the ATM either. So the bank, or credit card company is Spain is committing financial fraud. I can't see how you can call it anything else.

The depressing thing is that I notice there is (now closed) thread here about this dating back to 2005!

We'll discuss it with Saga tomorrow but my guess is they will shuffle off responsibility for it to someone else. Does anyone have experience of this and know if anything is being done about it?

chattychappy

You are meant to be given a choice, and if not it is grounds for complaint. In the end, if you authorised a Euro amount, then this is all they are authorised to bill your CC.

People might tell you here that you were given a choice but just didn't notice. I have found that outside of Spain (which I rarely visit) I have always been given a choice. But recently at the Melia hotel in Madrid, the following happened:

1) Hotel bill produced - a couple of queries, which they corrected. Total amount shown in Euros.

2) Was asked how I wanted to pay - by CC, I reply. (Halifax Clarity)

3) CC put into machine and amount shown on display (in Euros). PIN requested.

4) I entered PIN. Machine said return unit.

5) Upside down, I saw the screen then offered "bill in GBP or bill in Euros".

6) The receptionist selected "Euros", so there was no problem.

BUT, I could see from this that it would have been possible for my to have been billed in GBP (at their inferior rate) without choosing this. Of course I would have argued about this had it happened.

This only happened once, and only in Spain. Elsewhere I have always been offered a choice BEFORE entering a PIN. In the case of ATMs, I have been offerered the choice of "conversion" or to be billed in the local currency after choosing the amount of the withdrawal.

guesswho2000

I've had a number of situations where the currency has been selected afterwards, being the option of the retailer seemingly, so you do need to be vigilant - I've found it most prevalent in Thailand and mainland China (not so much so in Hong Kong/Macau), but as always ymmv.

bigadaj

Had a similar problem in Spain a couple of years ago. Paid for the hotel bill and automatically defaulted to pounds after I'd selected euros. Complained and had a bit of a go at the receptionist, who just looked a bit confused, got them to re-credit and redo the transaction in euros.

Receptionist seemed to be genuinely surprised at my reaction, so it could be they are trained to do this, and may be told it's in the customers interest. This was in an Accor hotel.

chattychappy

bigadaj wrote: »

This was in an Accor hotel.

Oh dear. I've used Accor in Germany and Taiwan without a problem...

Since I can get cash so easily on Clarity, I'm beginning to use cash more and more in order to avoid "Dynamic Currency Conversion" and other kerfuffles.

reclusive46

Luckily, one big advantage of the Lloyds Amex card is that its immune to Dynamic currency conversion (Amex have banned this practice) and free to use abroad. Its great in countries like Singapore or China where DCC is almost everywhere (Or even in countries like the US, where they'll take your card away in restaurants, agree to DCC on 'your behalf' and then bring your receipt) and any merchant taking international cards will generally accept Amex.

alderpoint

Amex have probably banned DCC since they make so much on the conversion themselves! I've had DCC forced on me for car hire in Germany and I complained vigorously - eventually the hire co offered me €50 compensation but it took a fight.

reclusive46

alderpoint wrote: »

Amex have probably banned DCC since they make so much on the conversion themselves! I've had DCC forced on me for car hire in Germany and I complained vigorously - eventually the hire co offered me €50 compensation but it took a fight.

Amex's rate is usually slightly better than Visa's and slightly worse than MasterCard's.

The reason they have banned it is that they are usually the processor for the merchant, so it wouldn't really benefit them or their customers + They do offer a service to allow the merchant to print the amount the customer will be charged in their own currency (But they will still be charged in the local currency, it just shows the amount that will appear on the cardholders statement in the cardholders currency).

Whereas with Visa or MasterCard, the merchant processor will be a foreign bank who would rather make the money on the conversion instead of the customer's bank.

Gilbo_Baggins

Had a couple of issues at work with DCC the latest being that the customer chose DCC and it went through in USD. Customer went away happy, but came back unhappy that he felt the exchange rate conversion and fee was too high. So it was re-credited and then put through in GBP, he went away happy. Later that week came back in unhappy when his bank had converted the now GBP at a much worse rate than he would have got with DCC.

zerog

Gilbo_Baggins wrote: »

Had a couple of issues at work with DCC the latest being that the customer chose DCC and it went through in USD. Customer went away happy, but came back unhappy that he felt the exchange rate conversion and fee was too high. So it was re-credited and then put through in GBP, he went away happy. Later that week came back in unhappy when his bank had converted the now GBP at a much worse rate than he would have got with DCC.

Tell him to get an Amex, as they don't charge forex fees in the US... (assuming he is American)

DCC actually benefits many people, just not (the vast majority of) UK cardholders.

chattychappy

zerog wrote: »

DCC actually benefits many people, just not (the vast majority of) UK cardholders.

It almost NEVER benefits UK cardholders (not sure if you meant to write that). The purpose of the scheme is to offer retailers an extra profit opportunity - paid for by cardholders.

In my experience, DCC typically loads a transaction by 7% to 9% if you choose to perform the transaction in GBP. The most I've seeen a CC load foreign currency transactions by is 2.99%, and as we know some cards do not load at all.