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

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

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