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snuggels
960 Posts |
 Posted - 21 Sep 2011 : 05:00:24
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A consumer watchdog says that UK travellers are being ripped off when they pay for their holiday money.
Most people do not shop around when they change their money for a holiday
Consumers Focus has made a "super-complaint" to the Office of Fair Trading, claiming that complex charges and misleading information mean people are paying too much to exchange currency.
A "super-complaint" is one made by a watchdog organisation on behalf of consumers, which is fast-tracked by the OFT.
The consumers' group wants to investigate three main areas where it says travellers are being short-changed.
Firstly, it says charges for using credit or debit cards abroad are complex and confusing, making it difficult for people to establish the full costs and to shop around.
Transactions at foreign ATMs can incur a charge of up to £4.50.
Consumers could pay more for their holiday money than they thought
Secondly, banks and credit card companies charge cash withdrawal fees to buy travel money with a card in the UK. The customer's fee is much higher than the cost to the provider.
And thirdly, the groups is complaining about the language of foreign currency exchange.
Phrases such as "0% commission" and "competitive exchange rates" are misleading because the exchange rates already include price mark-ups and so don't come at zero cost, Consumer Focus says.
Mike O'Connor, Chief Executive of Consumer Focus, told Sky News: "Almost half 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.
Cost Of Obtaining 500 Euros
:: HSBC £ 31.76 (+1.5% with credit card)
:: Barclays £ 29,84 (+2.5% with credit card)
:: Lloyds TSB £ 28.35 (+2.95% with credit card)
:: Royal Bank Scotland £ 27.12 (+1.5% with credit card)
:: Co-op £ 21.51
:: Post Office £ 17.65
:: Halifax £ 17.39 (+1.5% with credit card)
:: Thomas Cook £ 16.77 (+1.5% with credit card)
:: Change Group £ 12.43
:: ICE £ 12.17
"This is a huge difference for essentially providing the same service and typically banks offer the worst deals.
"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."
Researchers for Consumer Focus tested the exchange rate market on 25 August this year. They obtained 500 euros in a number of outlets and the differing costs are listed in our fact box (above).
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