By Ian Cragg
The Office of Fair Trading’s (OFT) investigation in to a super complaint from the watchdog Consumer Focus has led to five of the UK’s biggest banks and other credit card companies agreeing to remove many of the debit card fees that travellers get ‘stung’ with when using their cards abroad.
In addition, firms have also promised to make any charges more transparent when it comes to buying currency and also clearer in display on consumer’s bank statements.
Three of the UK’s largest banks, Barclays, Lloyds and RBS have agreed to the changes which will be a huge relief to holidaymakers and is expected to be implemented by the summer next year when millions of Brits will be heading overseas.
Most travellers don’t want to carry large sums of cash when abroad so it should provide peace of mind when paying for regular goods and services at cafés, bars, supermarkets and petrol stations as we do here in the UK.
Mike O'Connor, Chief Executive of Consumer Focus said:”Consumers should be able to buy foreign currency without being misled, confused or short-changed. The OFT has agreed with Consumer Focus that people are losing out due to the action of banks and others buying and selling holiday money. The fees charged are opaque and difficult for consumers to calculate.”
The Post Office has long held the monopoly of foreign currency exchange but has never guaranteed a very competitive rate. In fact, last week they were only offering the Euro at 1.12 to the Pound whereas several specialist foreign exchange brokers were offering 1.17 Euros to the Pound, so a significant difference.
If you left it until the last minute and purchased your Euros at the airport or ferry terminal you could expect an even less competitive rate than the Post Office so it certainly pays to shop around.
Melanie Johnson, Chair of The UK Cards Association, said:"Card use abroad has more than doubled over the past decade and this has happened for a very good reason. Cards are hugely convenient and offer consumers unique protections from loss and fraud that cash and travellers' cheques cannot match.”
This is a long overdue investigation into the millions of pounds in unnecessary bank charges being taken by the banks and one that can only benefit the consumer going forward when travelling abroad.
Ian Cragg is a Business Development Manager for TorFX currency brokers.