Card transactions abroad being taken at inflated exchange rates - Scam?

klim · 18 February 2019 at 1:07AM

I've just come back from a trip to Poland and have more than once been fleeced by something seemingly new.... On ATM's and card transactions there has for a while been the option of taking money / making payments at the daily exchange rate, or 'locking in' some generally awful exchange rate.
However, it seems that some hotels and restaurants are now taking payments and giving the cap exchange rate without any choice being offered. We paid in a restaurant and the receipt says 'I accept that I have been given a choice...' etc - there was NO OPTION to make the choice of exchange rate. We consequently paid 6% more.
We booked a hotel from hotels.com - the GBP price was shown on screen when we booked, and it said we would pay in the local currency. Our payment was take in the local currency a couple of weeks before we travelled, and instead of it coming to approx £81 as per hotels.com, it was approx £87 - around 7% markup.
We obtained a card receipt which states 'i accept that i have been given a choice of currencies for payment. i accept the conversion rate. the final amount and that the selected transaction currency is 'GBP'.
This was take by the hotel before our stay - as expected. What we didn't expect is for the transaction to be 7% higher before they switched currencies and provided an alternate exchange rate.

There are blatantly very odd, and really I can't believe legal - things going on here.

Note that we have a credit card which charges no foreign fees, and a debit card we draw cash with that charges no fees.

bradders1983 · 18 February 2019 at 8:55AM

There is no benefit to the retailer for doing this, if the hotel room was 500 zloty, they still get 500 zloty (minus their usual card processing fee) if you pay it in either zloty or pounds.

So who are you actually accusing of scamming you here, because it certainly wont be the retailer.

eDicky · 18 February 2019 at 8:56AM

You need to contact your card provider and explain that a choice of payment currency was not given, or was given and your selaction overridden, and needs to be disputed with the merchant. So payment in pounds by DCC (Dynamic Currency Conversion) was imposed without providing a choice, or despite the choice you made, which is contrary to regulations.

There's a code for this category of dispute, I don't know it offhand but it's been mentioned before. Assuming they know what you're talking about and don't try to fob you off (you may need to insist or escalate), a refund of the difference can be given, but whether they actually try to charge it back from the merchant to discourage the practice is doubtful.

bradders1983 · 18 February 2019 at 9:02AM

As an aside, if I was in a restaurant (as an example) abroad and paying by card I would not be entering my PIN into anything until I had seen the screen offering me the choice.

klim · 18 February 2019 at 10:44AM

For the hotel, the website said we would be paying in zloty, and it would be £81.26 based on the day's exchange rate. The hotel have a terminal with another company that offers their own exchange rate. It seems that the hotel then input either the £ amount or the zl, and the terminal company use an amended exchange rate.

So you go to book a hotel and see on the page the price you will pay. What you pay may actually be more than that because the hotel (or terminal company) may decide to take their own rate.

londoninvestor · 18 February 2019 at 9:44PM

bradders1983 wrote: »

There is no benefit to the retailer for doing this, if the hotel room was 500 zloty, they still get 500 zloty (minus their usual card processing fee) if you pay it in either zloty or pounds.

So who are you actually accusing of scamming you here, because it certainly wont be the retailer.

They get 500 zloty at the time of the transaction, but they'll get a cut of the currency conversion profit later:

Wikipedia wrote:

If the cardholder chooses to pay in their home currency, the DCC provider will cause the cardholder’s account to be debited by the transaction amount in the home currency, and the merchant's account to be credited with the amount in the local currency. At regular periods, usually monthly, the merchant would also be credited with the commission for DCC transactions.

bradders1983 · 19 February 2019 at 8:38AM

Aha I see. Fair enough.

zagfles · 19 February 2019 at 2:21PM

klim wrote: »

For the hotel, the website said we would be paying in zloty, and it would be £81.26 based on the day's exchange rate. The hotel have a terminal with another company that offers their own exchange rate. It seems that the hotel then input either the £ amount or the zl, and the terminal company use an amended exchange rate.

So you go to book a hotel and see on the page the price you will pay. What you pay may actually be more than that because the hotel (or terminal company) may decide to take their own rate.

Always tell them to charge you in local currency. If they don't, dispute it with your bank as eDicky says.

zagfles · 19 February 2019 at 2:24PM

bradders1983 wrote: »

As an aside, if I was in a restaurant (as an example) abroad and paying by card I would not be entering my PIN into anything until I had seen the screen offering me the choice.

Usually the currency choice comes after entering the PIN. If you are using a handheld terminal, keep hold of it after entering the PIN and select the currency yourself. Sometimes you need to do it twice, it asks "are you sure" or confirmation after you decline DCC.

klim · 19 February 2019 at 4:33PM

Thanks for the info. The transaction at the hotel should have been taken in zloty (as per our booking on hotels.com), it clearly says on the receipt that it was taken in GBP. This was not taken while we were there - it was taken when we booked, 2 weeks prior. Trying to get this through to hotels.com is like hitting one's head against a brick wall.

zagfles · 19 February 2019 at 6:06PM

klim wrote: »

Thanks for the info. The transaction at the hotel should have been taken in zloty (as per our booking on hotels.com), it clearly says on the receipt that it was taken in GBP. This was not taken while we were there - it was taken when we booked, 2 weeks prior. Trying to get this through to hotels.com is like hitting one's head against a brick wall.

But hotels.com didn't charge you by the sounds of it? The hotel did by what you've said.

Dispute it with your bank. It looks like you have proof the contract was in PLN but you were charged in GBP. Should be slam dunk chargeback for the difference. See https://chargebacks911.com/knowledge-base/visa-chargeback-reason-code-76/

Card transactions abroad being taken at inflated exchange rates - Scam?

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