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Consumers to get a fairer deal on travel money

Consumers to get a fairer deal on travel money

Category: Money

Updated: 20/12/2011
First Published: 20/12/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Consumers will get a fairer deal when buying travel money and using their cards abroad under a new range of measures.

The UK 's banks have agreed to scrap charges for customers using their debit cards to purchase foreign currency in the UK , which is typically between 1.5% and 2% of the amount being purchased.

Customers will also be given clearer and more accessible information on card charges they can incur when on their travels.

Some leading banks and lenders have agreed to print all charges and exchange rates clearly on monthly and annual customer statements instead of burying details in small print or even in separate documents.

Consumer Focus says this will mean customers can more easily work out exactly how much they are paying for foreign currency and shop around to get better deals.

The announcement by the Office of Fair Trading follows a super-complaint which was made by Consumer Focus earlier this year.

Figures show that people spent around £32 billion abroad (of which £27 billion was while on holiday), using both their debit and credit cards and foreign currency bought in the UK, resulting in an estimated revenue of £1.1 billion for travel money providers active in the UK.

The new rules, which are scheduled to come into force at the end of 2012 could save consumers millions of pounds each and every year.

"Companies should be earning profits by competing to provide the best value products and services, not through charges that are hard for customers to identify or interpret," John Fingleton, OFT Chief Executive, said

"We are very pleased that the travel money industry has agreed, following a OFT short investigation, to make these significant voluntary changes."

Mike O'Connor, Chief Executive of Consumer Focus said that consumers are losing because the existing system is confusing and difficult to calculate.

"It is particularly welcome that the OFT has worked with the big banks to stop withdrawal fees being charged when people buy currency on their card in the UK ," he added.

"It is only right that this unfair cost, which effectively charges customers for the privilege of taking money out of their own account, is stopped.

'We also want to see an end to deliberately misleading marketing phrases such as 0% commission, as services are not fee-free.

"Consumers have a right to know how much they are paying for their transaction and whether there are better options available."

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