FOREIGN exchange charges are being investigated by the Office of Fair Trading after a complaint from Britain’s Consumer Focus watchdog saying “a cocktail of confusing charges and poor transparency” costs travellers £1 billion a year.
Consumer Focus CEO Mike O’Connor said: “Converting £500 into euros can cost from under £10 to over £30 depending on where you switch your money. This is a huge difference for essentially providing the same service and, typically, banks offer the worst deals.”
They have three targets with their complaint to the OFT: charges for using debit or credit cards overseas; banks and credit card fees for buying foreign exchange in the UK, and using misleading phrases such as “0% commission”.
The OFT says it has 90 days to investigate and give its verdict. If it finds a case to answer, it can act under competition or consumer law, agree voluntary changes with the companies involved, refer the case to the Competition Commission or recommend action to the government.
The British Bankers’ Association said: “UK banks have invested heavily in recent years to ensure customers can use their financial services virtually anywhere in the world.”