From : BBC News – Banks and card companies will drop some currency fees

“Banks and credit card companies have agreed to scrap some charges they levy on holidaymakers buying foreign currency.

The move comes after pressure from the Office of Fair Trading (OFT).

The firms are also promising to display other costs more clearly in their monthly statements.

The OFT has been investigating a complaint from the watchdog Consumer Focus which claims the companies make £1bn a year from travel money charges.

The watchdog’s complaint said that converting £500 into euros could cost between £10 and £30, even though the service provided was essentially the same.

Five companies – including Lloyds, Barclays and RBS – impose charges of between 1.5 and 2% if customers use their debit cards before leaving the UK to buy foreign currency.

They have agreed to scrap this charge.

Banks and card companies will also show separately on statements those charges which are incurred overseas, including the typical “loading fee” of nearly 3%, rather than hiding them in the cost of the items travellers have bought.

The OFT is also forcing currency businesses to review 0% commission offers and reveal what the costs actually are.

Consumer Focus said charges for using debit or credit cards overseas were unnecessarily complex and confusing, adding that phrases such as “0% commission” and “competitive exchange rates” were misleading.

It says that exchange rates already include mark-ups levied by suppliers and so are not fee-free as the 0% commission might imply

A spokeswoman for the OFT, which will issue its response to the original Consumer Focus complaint on Tuesday, said there had been a substantial reaction to its request for information.

Consumer Focus points out that it costs banks and credit card providers an average of 9p and 37p respectively to process debit and credit card payments.”

via BBC News – Banks and card companies will drop some currency fees.