Holidaymakers buying foreign currency or using bank cards overseas will find it easier and cheaper to do so, as the Office of Fair Trading is set to make changes to how banks charge travellers.
The Office of Fair Trading (OFT) will impose new regulations that will force banks to make it clear how much they are charging customers for using cards.
Following a super-complaint from watchdog Consumer Focus, the OFT has found that charges for purchasing foreign currency and using cards overseas can be confusing for customers.
Most leading banks have agreed to the changes put forward by the OFT, including Lloyds, Barclays, RBS, Santander and the Co-operative Bank.
All have agreed to scrap charges for customers who use their debit cards to purchase foreign currency in the UK, which many people do before flights. There was previously a charge of between 1.5 and 2 per cent.
“We are very pleased that the travel money industry has agreed, following an OFT short investigation, to make these significant voluntary changes,” said John Fingleton, OFT Chief Executive.
“We believe they will reduce confusion about the charges that apply when buying travel money in the UK or using cards overseas, and hope they will allow holidaymakers to be far better informed when making choices about how they spend abroad. This should drive greater competition in the UK travel money market.”
A joint agreement by the UK Cards Association and the British Bankers Association has been reached that will lead to more transparency about charges for using cards abroad.
As well as this, card companies including Capital One and American Express have agreed to display charges for using cards abroad more clearly on monthly and annual statements.
Mr Fingleton added: “Companies should be earning profits by competing to provide the best value products and services, not through charges that are hard for customers to identify or interpret.”
