A consumer watchdog has said that UK travellers are being ripped off when they pay for their holiday money.
Consumer 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 currencies when they take their money abroad.
"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," Mike O'Connor, Chief Executive of Consumer Focus said.
It is reported by Sky News that transactions at foreign ATMs can incur a charge of up to £4.50.
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 and here are the costs their research.
HSBC, £31.76, plus 1.5 per cent on credit card payments.
Barclays, £29.84, plus 2.5 per cent on credit card payments.
Lloyds TSB, £28.35, 2.95 per cent on credit card payments.
RBS, £27.12, plus 1.5 per cent on credit card payments.
Thomas Cook, £16.77 plus 1.5 per cent on credit card payments
Consumer Focus has reported that the charges for UK customers costs £1bn a every year. It is unclear how much of that £1bn is warranted and how much is excessive charging, which is why the group has called for the investigation.
Customer Focus wants wide changes to the way UK travellers are charged. Here are there recommendations sent to the Office of Fair Trading.
- Simplification of charging structures for using cards overseas. Greater disclosure alone may not help consumers - the current raft of charges are so complex that they may not be understood by customers even if transparency is increased
- Cash-withdrawal charges on UK transactions should reflect costs or even be banned if not justified
- Clearer explanation of exchange rates used by suppliers to make comparison easier for consumers. Customers would benefit from a clear illustration of the rates they will receive eg exactly how much foreign currency £100 will buy once all charges have been applied
"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," O'Connor said.
"If holiday makers buy their currency from the Post Office, travel agent or bureaux de change many are stung with cash withdrawal charges by their bank, effectively for the privilege of taking money out of their own accounts," Consumer Focus added.