Victory declared for consumers over foreign currency charges

By UK CreditCards.com

Travellers could make considerable savings when buying foreign currency or using their credit and debit cards abroad after pressure from a consumer group has caused a shake up in how banks and currency shops market and deal with these transactions.

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Following a super-complaint launched by Consumer Focus, the Office of Fair Trading (OFT) has drawn up a list of consumer commitments that high street banks must deliver on in order to tackle issues of complex charges and misleading information that have seen consumers pay out too much for foreign currency.

Foreign currency debit card fee dropped
All of the major lenders have agreed to stop charging consumers for buying foreign currency with a debit card while in the UK. Be wary, however, as this will only happen around mid-2012 so charges may still apply for now. When put in place travellers will be able to buy currency in the UK without worrying about any unseen charges when paying by card.

Cutting out confusion
Banks will now make it much clearer to customers when and how much they will be charged when making transactions while abroad. Some have even gone so far as to say they will print all charging details on statements instead of hiding them away in the fine print. The main benefit of this is it allows consumers the chance to compare the costs of different lenders.

Crackdown on mis-marketing
Foreign currency sellers have also agreed to make their marketing material much clearer in order that consumers are not caught out by confusing 0% commission claims that do in fact incur a charge.

Both Consumer Focus and the OFT have welcomed these changes and urged banks and currency vendors to win back consumer trust on these matters by swiftly implementing new policies and improving overall customer service for travellers. 

See related: Editor's choice: The best prepaid cards for travel; Travellers to US may be unable to use credit cards

Published: 29 December 2011