Wednesday, 21 September 2011

Currency exchange charges investigated

The Office of Fair Trading is to investigate charges imposed by banks and other currency exchanges for changing money abroad. The move follows a “super complaint” from watchdog Consumer Focus, which believes a mix of complex fees and poor or misleading information means travellers are paying too much. It says charges for using debit or credit cards overseas are unnecessarily confusing for consumers. They vary significantly and make it difficult for people to establish the full costs and shop around for better deals. Cash withdrawal fees imposed by banks and credit card providers on customers using plastic to buy travel money in the UK do not reflect costs. Consumer Focus says debit and credit card payments cost an average 9p and 37p respectively to process but typical charges to customers are 1.5% - 2% of the amount withdrawn, up to a ceiling of £4.50. And offers of “0 per cent commission” can be misleading as the rate m ay include a mark up to reflect the supposed saving. Mike O'Connor, Consumer Focus's chief executive says: “Almost half of us travel abroad every year and we face a confusing array of often hidden charges every time we buy currency. Converting £500 into euros can cost from under £10 to over £30 depending on where you switch your money. This is a huge difference for essentially providing the same service and typically banks offer the worst deals.”

No comments: