Ask Sindie: Beware of the new scam when using a credit card abroad

Some retailers get you to pay in sterling and then inflate the bill on the currency conversion
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Q: I've just returned from a trip to Barcelona, during which I spent heavily on my credit card.

However, after eating out in a restaurant one evening, I noticed something in the small print on the bottom of the receipt. This was that I had been given a choice on whether to pay in euros or sterling - and that I had opted for sterling.

Not only was I given no such choice but, when I checked in more detail, I realised there had been a currency conversion from euros to sterling that was very unfavourable to me.

Can you tell me any more about it and whether there's anything I can do to avoid being stung again?

TW, via email

A: You're one of a growing band of Britons who have fallen victim to this practice.

It's officially known as "dynamic currency conversion" (DCC), a relatively new and entirely legitimate payment choice but one, as in your case, that can be exploited by retailers and restaurants to take advantage of unsuspecting holidaymakers.

This is how DCC is meant to work. Call for the bill in an overseas restaurant and the waiter brings you a slip with the total marked in the local currency.

Usually, you'd pay the bill as normal and your UK card provider would then use its own internal exchange rates to calculate how much equivalent sterling to debit from your account. In most cases, providers levy fees of up to 4 per cent for this "service".

However, more and more overseas outlets now offer a choice, where you can pay in sterling using a local exchange rate offered by the retailer.

In theory, this lets you take advantage of any volatile currency fluctuations that might work in your favour. In practice, this is rarely the case in Western nations. As a result, customers will usually pick up a bigger bill for an unfavourable exchange rate plus a conversion fee imposed by the local retailer.

That wouldn't be a problem provided everyone was aware of how the system worked and really was given a say in which currency they used. But some devious traders automatically tot up the bill and present it in sterling as a fait accompli.

Although Visa and Mastercard govern the DCC process and say consumers must be made aware of any choice by the retailer, your experience underlines bad practice.

If you find yourself in this position again, simply ask to be billed in the local currency, says Richard Mason from the price- comparison service You are entitled to do so, just as you are within your rights not to sign if the signature slip shows DCC and states you accepted the choice offered - when it wasn't.

Note, however, that crossing out the statement will not stop the transaction being processed in sterling. You need to demand that it be changed. "We've been noticing this practice for about a year now," he adds. "Make sure you check any slip or bill before signing, or entering your pin."

Nationwide building society estimates that UK cardholders were charged an extra £5m by retailers using DCC - just in the month of July last year.

Be vigilant elsewhere abroad, too: a 12-month pilot for DCC at cash machines was launched on the Continent last July.

If you need help from our consumer champion, write to Sindie at The Independent on Sunday, Independent House, 191 Marsh Wall, London E14 9RS or email We cannot return documents, give personal replies or guarantee to answer letters. We accept no legal responsibility for advice given.

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