Holidaymakers are being charged too much for their foreign currency because of complex charges and misleading information, according to watchdog group Consumer Focus.
UK travellers exchange around £27bn each year and Consumer Focus questions whether much of the estimated £1bn charged in fees is warranted. It has submitted a so-called super-complaint to the Office of Fair Trading (OFT).
Consumer Focus claims that converting £500 into euros at banks or currency exchange companies can cost between £10 and £30, even though the service provided was essentially the same. It has also raised questions about charges when using credit or debit cards overseas.
Areas of concern include:
- Complex card charges that prevent holidaymakers shopping around for a better deal
- Charges for buying currency in the UK with a card failing to reflect the costs of processing the payment
- Hidden mark-ups that make marketing phrases such as ‘0% commission’ misleading
Consumer Focus chief executive Mike O'Connor said: “Individuals buy holiday money infrequently and so may not shop around much or may just stick with the same supplier.
“A cocktail of confusing charges and poor transparency means collectively we are losing out in a big way.”
A super-complaint can be made by a designated consumer group to the OFT if an issue is ‘significantly harming the interests of consumers’.
The OFT has 90 days to respond by stating what action, if any, it plans to take on the issue and the reasons behind its decision.
The British Bankers’ Association, which represents the major UK banks, said it was disappointed Consumer Focus had failed to talk to the industry before submitting the complaint.