British consumer organisation complaints about high fees when buying money or using credit cards overseas

The British consumer organisation Consumer Focus has issued today a super-complaint to the Office of Fair Trading (OFT). In the complaint Consumer Focus criticizes that UK travellers pay too much for foreign currency. The consumer watchdog estimates that UK travellers spent around 27 billion Pound per year. They criticise that charges to customers for exchanging money were around 1 billion Pounds per year. These charges were warranted and excessive.

Consumer Focus called OFT to investigate in particular the following problems:

  • Charges for using debit or credit cards overseas were unnecessarily complex and confusing for consumers. They varied significantly and made it difficult for people to establish the full costs and shop around for better deals.
  • Banks and credit card providers charged customers cash withdrawal fees when buying travel money with a card in the UK. These charges did not reflect actual costs.
  • The use of marketing phrases such as “0% commission” and “competitive exchange rates” by suppliers were misleading and made it difficult for consumers to make informed choices and compare banks with bureaux de change or the Post Office.

Mike O’Connor, Chief Executive at Consumer Focus said: „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. This is a huge difference for essentially providing the same service and typically banks offer the worst deals.“

In the UK designated consumer bodies can make a super-complaint. Consumer organizations can submit a complaint when there was any feature, or combination of features, of a market in the United Kingdom for goods or services which appears to be significantly harming the interests of consumers. The OFT must say publicly within 90 days how it proposes to deal with the complaint (Enterprise Act 2002, Section 11).


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Source: Consumer Focus and OFT