Unauthorised conversion into Sterling

Chomeur

What to do if a merchant makes an unauthorised conversion of a payment into Sterling on your card? Naturally, it's at a very poor rate. I have screenshots which show the EUR amount which I agreed to. I have complained to the merchant, who just keep referring me to their useless chatbot, and to curve, through whom I made the payment. Curve agree that the conversion was at a poor rate, but say that there is nothing they can do, and refer me back to the merchant. It's not that much money, but seems to set a very bad precedent, and it can't be right. Should I go to the Financial Ombudsman?

born_again

Noting FO can do when the issue is with a retailer. Bank only process the transaction in currency it is passed to them.

DullGreyGuy

Chomeur said:

What to do if a merchant makes an unauthorised conversion of a payment into Sterling on your card? Naturally, it's at a very poor rate. I have screenshots which show the EUR amount which I agreed to. I have complained to the merchant, who just keep referring me to their useless chatbot, and to curve, through whom I made the payment. Curve agree that the conversion was at a poor rate, but say that there is nothing they can do, and refer me back to the merchant. It's not that much money, but seems to set a very bad precedent, and it can't be right. Should I go to the Financial Ombudsman?

Whats your allegation against Curve? They just process the transaction you put through, they have no control over if the transaction was presented as Euro or GBP.

Persumably the merchant isn't in the UK hence why the transaction was in Euros and hence they won't be subject to the uk regulators and not the Financial Ombudsman even if they are a financial services company. If they aren't FS then thats even more reason why it won't apply. 

Chomeur

So the merchant could have said the exchange rate was 1 euro = £100 and there would be nothing I could do? Or should I be taking it up with my credit card company?

Alexsas

when I was in a similar situation (a Polish ski resort just forced the ££ without even asking), I just did a chargeback for a difference between the interchange rate and the rate they charged me. all went through just fine.

Chomeur

Curve claim to allow chargebacks, but are refusing me. https://help.curve.com/how-do-i-raise-a-chargeback-claim-r1NFrO3UO

eDicky

Was the transaction online or in person? Which country? Were you given the option of payment in GBP or EUR and if so, what did you select?

p00hsticks

Chomeur said:

So the merchant could have said the exchange rate was 1 euro = £100 and there would be nothing I could do? Or should I be taking it up with my credit card company?

The card companies (Visa, Mastercard etc) regularly (I think daily) share files of exchange rates with card processors and issuers who have to use those conversion rates, so once the card transaction is made in a particular currency the merchant has no say in what conversion rate is subsequently used for processing. 

But the merchant can choose whether they offer to sell goods or services in different currencies, and - unless local laws forbid it - there is nothing to stop them charging a different price in different currencies. 

This is from Lloyds bank's website
Using your credit card abroad | Lloyds Bank

Should I pay in sterling or local currency?

When using your credit card abroad, you’ll often be given the option to pay in local currency or convert to sterling. To make an informed decision, you’ll need to check your card’s terms and conditions to see all of the costs in detail.

If you choose to pay in local currency...

• Your credit card provider will use a conversion rate offered by Visa, Mastercard or American Express. This will usually be better than the rate you would get from the retailer or ATM.
• Expect a small currency conversion fee and, if you’re withdrawing cash, a cash transaction fee.

If you choose to pay in sterling...

• This means the retailer or ATM will convert the currency to sterling for you. This will usually be at a less competitive exchange rate than you’d get from your credit card provider.
• You may also be charged a fee by the retailer or ATM for this service

Emily_Joy

I had a similar issue years ago. I paid with virgin money credit card abroad and was charged in £ with poor exchange rate. I resolved it by putting a formal request for chargeback  under visa/mastercard rules (can't remember which card it was). So if I were you, I would dial the number on the back of the card, go through security and ask to log in a chargeback request under code xxxx, that you can look up in MC/visa chargeback guide.

DullGreyGuy

Chomeur said:

So the merchant could have said the exchange rate was 1 euro = £100 and there would be nothing I could do? Or should I be taking it up with my credit card company?

If thats what they had told you then there is only one thing which you could have done which is not to proceed with the transaction. A merchant is free to set whatever prices they want and its perfectly legal for them to have different prices for different currencies, its standard process for companies to use a poor FX rate for anything that isn't their preferred currency to avoid the risks of movements meaning they get less than what they want in the preferred currency and also, if it is the merchant not the merchant bank setting the FX, so they can have consistent pricing in other currencies and not changing hourly/daily. 


However this assumes they told you and you went on to make the transaction. It initially sounded like you had entered your card details against a Euro price and its only when it hit your account that you saw it had been charged in GBP. If this is the case and you can evidence it then you potentially do have a chargeback for wrong currency (not poor FX) but @born_again will be better placed to confirm - its certainly one of the dispute reason codes.

Voyager2002

This is an example of what is called DCC (Direct Currency Conversion). There is plenty of information about DCC on this site, and it is explicitly mentioned in the Mastercard rules. 

I have a similar case under review by the Ombudsman at the moment, but with Visa international. While the rules published by Visa and Mastercard are very clear about what the card issuer should do, my experience is that neither the card issuer nor the Ombudsman's office understand the issue, and they are not referring to the rules that they should be applying. Visa international are impossible to contact.