Currency exchange 'is too costly'

04 November 2011 09:16

Consumer Focus has called for a simplification of charging structures for using credit or debit card overseas

Consumer Focus has called for a simplification of charging structures for using credit or debit card overseas

Consumer Focus has called on the Office of Fair Trading (OFT) to carry out an investigation on currency exchange bureaus as it believes that holidaymakers going abroad are not getting the best deal when buying foreign money.

The watchdog claims that foreign exchange providers confuse consumers with misleading information and complex charges, which lead them to pay too much when buying foreign money.

This could create problems for holidaymakers who may be struggling to find enough cash to take out comprehensive travel insurance.

According to Consumer Focus, it is unclear how much of the estimated £1 billion a year charged in currency exchange fees are warranted and how much are excessive.

It said that customers would benefit from a clearer explanation of exchange rates as it was concerned over hidden mark-ups

The watchdog has also called for a simplification of charging structures for using credit or debit card overseas and cash withdrawal fees for UK transactions to reflect the costs of processing.

Mike O'Connor, chief executive at Consumer Focus, 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."

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