Brits misled by '0% commission' travel money
Brits exchanging their holiday money at places claiming to be "commission-free" or offering "0% commission" could end up paying much more than they bargained for.
Many are being misled by headline advertising for travel money which distorts consumers' understanding of what they really get for their pound, claims FairFX.com.
Stephen Heath, chief executive of FairFX, said: "People may think they are paying 'zero per cent commission', but that couldn't be further from the truth.
"When it comes to holiday money, people are clearly being swayed by the misleading headline advertising tactics adopted by many providers."
The true cost to consumers is not only the advertised commission rate, but what exchange rate they receive.
Costs can range from three to five per cent of the total exchanged at High Street providers, seven to 12 per cent at London airports, and up to as much as 15 per cent at some regional airports.
Most people do not understand what "0% commission" means. Some 37 per cent of travellers think it means providers don't charge for the service and 23 per cent assume companies simply don't charge commission.
To compound the problem, 58 per cent said they look for a provider who charges '0% commission' when they get their holiday money.
Mr Heath added: "Quoting '0% commission' has become the normal advertising tag line for currency exchange providers, but most people don't understand what it actually means. Providers are using this naivety to increase their bottom line."
Just 16 per cent understand that they can still be charged commission, fees and a poorer exchange rate and do take this into account when making their purchase.
Around half of Brits want providers to be honest about the commission they are being charged and a further 30 per cent said they would prefer a separate fee or charge rather than pay commission.
"FairFX is calling on the Office of Fair Trading to enforce fair, industry-wide, transparent advertising for foreign currency," Mr Heath said.
"The OFT exists to protect consumer interests and ensure businesses are fair and competitive."
Comments
Newsletter sign up