Simon Read: 'Outlaw misleading 0% currency commission adverts'

The biggest travel money con is the offer of 0 per cent commission, according to currency specialist FairFX.

That may seem counter-intuitive but the firm says the tempting deals hide a range of high fees and charges that inavariably mean 0 per cent commission means paying more for currency.

Regular traveller Jim Ford is typical. He was caught out by the small print in a 0 per cent deal. "It was promoted at the stores that anything you do not spend, they would buy back at the original rate, commission free. I thought that sounded great."

But after his holiday, Jim approached the company again with the $1,800 he had left over, after failing to buy the gadgets he had hoped to snap up. "I was then told that the upper limit for returning the money was £100 and anything over that I had to return at the current rate of exchange. It meant I got £236 less than I had paid out!"

"People are being swayed by the misleading headline advertising tactics adopted by many travel money providers," says Stephen Heath, chief executive of FairFX. He accuses currency firms of tricking holidaymakers into buying foreign money from them by offering 0 per cent commission without revealing the real cost of the currency. On Monday the pre-paid currency card firm is launching a Twitter campaign to try to persuade the Office Of Fair Trading to outlaw firms advertising such deals.

The nub of the problem is that just because a bureau de change advertises no-commission deals, that does not mean it is the cheapest."They don't tell people about other charges like the amount of profit built into exchange rates. We think that's wrong," says Heath. He would like to see a universal comparison method to stop companies misleading potential customers

"I believe high street chains are taking advantage of their respected position," Heath says. "If for instance you look at the rates the Post Office offers, despite being 0 per cent commission, the rates are usually worse than many online providers," Heath claims. "They effectively have commission built into the rate they offer and that's why this form of advertising has to go."

The Post Office responds: "The issue of commission should not be confused with charges and fees. In the worst case example, foreign exchange providers at airports tend to offer poor rates and charge commission on top of this. Commission is also levied in different ways (fixed fee or percentage) which can be confusing for consumers. We aim to be completely transparent."

In fact some companies, including FairFX, have hefty delivery charges unless a large amount of currency is purchased, the Post Office says. For instance, a fee of £6 is levied by FairFX on all transactions under £750.

In FairFX's survey, 93 per cent voted for 0 per cent commission ads to be banned. "The OFT should enforce the ban, and provide a better system for consumers to compare the cost of travel money," says Heath.

To add your voice to FairFX's Twitter petition go to http://act.ly/47e

How to avoid costly currency mistakes

there's no need to pay over the odds for foreign money. Plan ahead, research online and you'll be able to avoid high fees or poor exchange rates.

Sarah Munro, the Post Office travel money expert says: "Beware of hidden charges and headline rates offered by some foreign exchange providers – a great rate for the euro or US dollar does not always apply to other popular currencies."

In general you'll find better rates online as long as you can book ahead but be wary of seemingly best-buy deals that carry a transaction fee. It can be anything up to £9, which dramatically increases the cost of your money exchange, especially on smaller amounts.

One alternative is to get a pre-paid currency card. They often offer notably better exchange rates but may charge for withdrawals at overseas cash machines. At up to €7.50 per withdrawal that's to be avoided. But the cards usually have no fees when you buy at shops and restaurants.

Their big advantage over currency is security. If the card is stolen or lost criminals can't take the money because it is chip and PIN protected. The card issuer has a record of how much cash was on the card at the time it went missing and can send out a replacement, often free.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

    £24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Ashdown Group: Business Analyst - Financial Services - City, London

    £50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

    SThree: Trainee Recruitment Consultant

    £18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

    Day In a Page

    General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

    Chuka Umunna: A virus of racism runs through Ukip

    The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
    Yemen crisis: This exotic war will soon become Europe's problem

    Yemen's exotic war will soon affect Europe

    Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
    Marginal Streets project aims to document voters in the run-up to the General Election

    Marginal Streets project documents voters

    Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
    Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

    The real-life kingdom of Westeros

    Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
    How to survive a social-media mauling, by the tough women of Twitter

    How to survive a Twitter mauling

    Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
    Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

    At dawn, the young remember the young

    A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

    Follow the money as never before

    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
    Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

    Samuel West interview

    The actor and director on austerity, unionisation, and not mentioning his famous parents
    General Election 2015: Imagine if the leading political parties were fashion labels

    Imagine if the leading political parties were fashion labels

    Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
    Public relations as 'art'? Surely not

    Confessions of a former PR man

    The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
    Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

    Bill Granger's luxurious sweet treats

    Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
    London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

    The mother of all goodbyes

    Paula Radcliffe's farewell to the London Marathon will be a family affair
    Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

    Steven Naismith: 'We know we must do better'

    The Everton forward explains the reasons behind club's decline this season
    Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

    Michael Calvin's Last Word

    Praise to Wenger for having the courage of his convictions