A leading consumer group is calling on the Office of Fair Trading (OFT) to launch an investigation into the way banks charge holidaymakers for using their debit or credit cards abroad.
Banks and credit-card providers vary widely on the amount they charge travellers when using their cards abroad, something that is now being called into question. When spending money abroad the hidden fees and charges all add up and Consumer Focus research has found that UK travellers are charged around £1 billion each year for exchanging money.
Charges for using your card abroad do not reflect actual prices, according to the watchdog. Converting £500 in Euros for example could cost less than £10 to exchange or over £30 depending on where holidaymakers switch their cash.
A debit-card payment costs an average of £0.09 to process and credit card payments costs just 37p yet the charges that holidaymakers face are typically 1.5 or 2 per cent of the amount converted, some reaching as much as £4.50.
The OFT is being asked to investigate the transparency of charges for using a debt or credit card abroad as it’s currently complex and confusing for customers, making it difficult for them to shop around for the best deal on the market.
As well as overseas credit and debit card charges, travellers often get a raw deal. Figures published by consumer group Which? this month show that air travellers are paying an estimated £265,000 per day in debit surcharges to airlines, despite calls from the OFT to ban them.
In addition, earlier this month a campaign was launched by a leading online travel money website to ban misleading travel money advertising. A FairFX survey of more than 1,000 consumers found that 93 per cent of travellers believe that “0 per cent commission advertising” should be banned.
Buy-back schemes typically advertise 0 per cent commission on any currency bought back from travellers following a holiday. However, the reality of such schemes is often very different and can mislead consumers.
(Image: andresrueda)
