One of the latest injustices which Consumer Focus is tackling is in regards to the high cost of foreign exchange as British travellers prepare to go abroad on holidays. It is reported that today they will wage war against the high fees and hidden costs associated with exchanging GBP for foreign denominations to spend in other countries.
It is estimated that British citizens are spending as much as a £1 per year in currency exchange in order to have money to spend while on holiday. According to Consumer Focus, they are losing too much, losing in a big way, the consumer watchdog group will complain.
The advocate group is asking OFT for a full-fledged investigation into how much consumers are being charged to use their bank card abroad and also for purchasing foreign currencies. Mike O’Connor, the chief executive of Consumer Focus, states that charges are not only complex, they are dubious as well.
Further, he notes three main areas in which Brits are losing money through these exchanges. Of primary importance is the fees charged for using their credit or debit cards abroad. He feels the charges are unnecessarily complex and altogether too confusing. As well, each card varies to the extent that it hinders consumers from comparison shopping.
Although the amount charged for transactions abroad isn’t significant, the amount of money banks charge for conversion of pounds to foreign currencies is over the top with rates being anywhere from 1.5 and 2% of the amount being converted. This is their ‘commission.’
Also noted in the super-complaint is the fact that adverts are thoroughly misleading. With phrases like ‘competitive exchange rates’ and ‘0% commission,’ consumers are not aware that there may be little truth in the wording. It is the hoped that the Office of Fair Trading will act on this complaint and investigate the unfair commissions and profit margins being made at the expense of British holidaymakers.