Watchdog seeks currency fees probe
Wednesday 21 September 2011
A consumer watchdog today issued a super-complaint to fair trade officers about the amount holidaymakers are paying for their foreign currency.
Consumer Focus wants the Office of Fair Trading (OFT) to investigate what it believes is complex charging and poor information for travellers spending money abroad.
Consumer Focus said charges for using debit or credit cards overseas were unnecessarily complex and confusing.
It added that marketing phrases such as "0% commision" and "competitive exchange rates" were misleading.
It reckons that charges to customers for exchanging money are around £1 billion per year.
Consumer Focus added that it was unclear how many of these charges were warranted and how many were excessive, which is why it was calling on the OFT to carry out its own investigation.
Consumer Focus chief executive Mike O'Connor said: "Many 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."
He went on: "If holidaymakers buy their currency from the Post Office, travel agent or bureaux de change many are stung with cash withdrawal charges by their bank, effectively for the privilege of taking money out of their own accounts.
"Individuals buy holiday money infrequently and so may not shop around much or may just stick with the same supplier. A cocktail of confusing charges and poor transparency means collectively we are losing out in a big way. We are calling on the OFT to investigate and work with the industry to send these dubious and complex charges packing."
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