foreign currency for overseas use of credit and debit cards
The Office of Fair Trading to investigate travel money
Consumer Focus has sent a massive complaint about travel money to the Office of Fair Trading (OFT) regarding the cost of obtaining foreign currency and overseas use of credit and debit cards.
The official customer body Consumer Focus recently denounced the hidden fees banks charge to Brits abroad. Now it has gone a step forward and has called on the OFT to investigate.
Once the OFT receives the formal complaint, it will consider the issues written in it to establish whether or not these are significantly harming the interests of consumers.
The OFT has 90 days to consider a super-complaint and will publish its reasoned response no later than 20th December. During that time, it will invite interested parties to provide any information which they consider may be useful to its assessment.
Consumer Focus denounced that up to £1bn is ripped-off from British bank accounts every time customers use their card when they are abroad. It said it is unreasonable that up to £30 in fees is charged to Brits who convert £500 into Euros.
Regarding card fees used overseas, the customer body argued that it is not fair that every time Brits pay with their prepaid or credit card or withdraw money, they are forced to pay expensive and obligatory extra charges.
Furthermore, it criticised that those extra fees are normally unclear and mislead customers. Through a mechanism known as “exchange rate loading”, banks charge customers (many times) without their consent.
"We've campaigned successfully in the past for banks to bring their charges out into the open, enabling holidaymakers to see how much they are likely to be charged. But there's still more to be done,” commented John Crossley, head of current accounts at Nationwide.
Travel money cards, in contrast, could be a great idea when travelling abroad. They are prepaid cards and some have few charges for foreign transactions or for withdrawing cash abroad.